Retail News CRM

Tag: tesco homeplus

  • Orion is out in bidding for Tesco’s Korea operations

    Orion is out in bidding for Tesco’s Korea operations

    Private-equity firms such as MBK Partners and the Carlyle Group are among the short-listed bidders for Homeplus, a local discount retailer owned by the U.K. grocery chain Tesco, according to people with knowledge of the matter.

    Affinity Equity Partners and Goldman Sachs’ private equity arm have also been short-listed, while the local snack maker Orion, which had submitted a bid, failed to move to the next round after a bid at the lower end of the bidders’ range. Orion’s bid was said to have been between 4 and 5 trillion won ($3.6 billion to $4.4 billion).

    Orion shares jumped 5.7 percent on Thursday after the news of its withdrawal. “Homeplus was probably too big of a prize for Orion to handle. Its failure has been expected,” a brokerage analyst said.

    Hyundai Department Store, which had earlier shown interest in bidding, decided not to, the retail company said. The chain is currently focused on getting a license for a duty-free business in Seoul.

    The Homeplus sale is expected to fetch around $6 billion for the troubled U.K. grocery chain Tesco, which is dealing globally with massive losses and huge outstanding debts. The sale of its Korean operations is part of its efforts to secure cash as it tries to stay afloat.

    Tesco entered the Korean retail market jointly with Samsung C&T in 1999, initially controlling 81 percent stake in Homeplus but gradually buying out Samsung’s stake.

    Homeplus operates 107 hypermarkets and 828 express stores across Korea, and is the third-largest discount retailer, after E-Mart and Lotte Mart, according to regulatory filings.

    Korea’s discount retailing market is estimated to be worth 34.9 trillion won as of the third quarter of 2014, down from 45.1 trillion won a year earlier. The sector has been hurt by an economic slump and government regulations that restrict operations during weekends to protect mom-and-pop stores.

    Homeplus saw a net loss of 299 billion won last year. Homeplus Tesco reported a net loss of 48.8 billion won and Homeplus Bakery contributed a net loss of 6.7 billion won.

    Lees ook:

  • Tesco’s South Korea empire draws interest from private equity giants

    Tesco’s South Korea empire draws interest from private equity giants

    KKR and Carlyle, the US private equity firms, have been invited to bid for the Asian business, which trades as Homeplus, while London-based CVC Capital Partners has also been asked to bid.

    The decision to sell the South Korean stores comes as the retail giant’s chief executive Dave Lewis looks to streamline the business, to concentrate on its core UK shops and raise cash.

    After two decades of uninterrupted growth, Tesco has been struggling after it became distracted by overseas expansion and failed to spot the threat of discounters like Aldi and Lidl.

    The retailer is now looking to slash capital spending, as well as fund a vicious supermarket price war and put more people on the shop floor.

    Hong Kong-based Affinity Equity Partners and Asia-focused MBK Partners were also invited to bid, and Hyundai Department Store, which is separate from the car maker, said today that it was considering bidding.

    Tesco, advised by HSBC, has asked for indicative bids later this month.

    If the sale is achieved it would be Asia’s biggest private equity deal and the region’s second biggest consumer deal ever. Sovereign wealth funds could be involved in the financing of it, given the size of the sale.

    Homeplus is Tesco’s largest business outside Britain, with more than 400 stores, 500 franchise stores and over six million customers a week.

    But the business has been under some pressure, with falling like-for-like sales for the last two years.

    Tesco is also selling its £1 billion Dunnhumby data business, and has already sold its Blinkbox digital entertainment service and Tesco Broadband to TalkTalk for an undisclosed sum.