Tesco Asks Thai Tycoons for Next-Round Bids for Asia Unit
No certainty that Thailand’s Dhanin Chearavanont’s Charoen Pokphand Group and Central Group will proceed.
(Bloomberg) -- Britain’s largest supermarket chain Tesco Plc is inviting Thai tycoons to the second round of bidding for its operations in Thailand and Malaysia that could fetch more than $7 billion, according to people with knowledge of the matter.
Thai billionaire Dhanin Chearavanont’s Charoen Pokphand Group and Central Group, controlled by the Chirathivat family, were picked to proceed with deadline for the bids due in the next few weeks, said the people. Tycoon Charoen Sirivadhanabhakdi’s TCC Group has also been chosen, said the people, who asked not to be identified as the information is private.
While the companies are seeking financing for their potential offers, there’s no certainty that they will proceed, the people said. Representatives for Central Group, CP, TCC and Tesco declined to comment.
Shares of Tesco on Thursday climbed as much as 1.9% to the highest intraday level since Jan. 10, while the benchmark FTSE 100 Index was little changed.
The novel coronavirus outbreak has had a limited effect on dealmaking in South East Asia so far. Central Group, a conglomerate with businesses spanning from department stores to hospitality, raised about $2.5 billion through the spinoff of its retail arm in the country’s largest initial public offering. Lion Air and restaurant-chain operator PT Champ Resto Indonesia are in the process of gauging investor demand for their IPOs.
Tesco said in December that it was carrying out a strategic review of its Thai and Malaysian businesses after receiving interest. A sale of the Asian operations would allow the supermarket chain to get an infusion of cash to continue a restructuring of its core U.K. business that has cut thousands of jobs.
Tesco has more than 2,000 hypermarkets and convenience stores in Thailand under the “Tesco Lotus” brand. The chain was founded by CP Group in 1994 and later taken over by the British firm, according to its company website. In Malaysia, Tesco has more than 70 shops, according to its annual report. Malaysian conglomerate Sime Darby Bhd owns a 30% stake in Tesco Malaysia.
Berli Jucker Pcl, controlled by TCC, bought a controlling stake in Casino Guichard-Perrachon SA’s Thailand supermarket chain Big C Supercenter Pcl for 3.1 billion euros ($3.4 billion) in 2016.
Last month, Thailand’s antitrust office established a special committee to evaluate the impact of the potential Tesco deal as a sale might lead to a monopoly or a business that has power over the country’s retail sector.
--With assistance from Deirdre Hipwell and Natnicha Chuwiruch.
To contact the reporters on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net;Anuchit Nguyen in Bangkok at anguyen@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Reinie Booysen
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