BIDDERS VIE FOR CARREFOUR ASIAN STORE

Terry Leahy, outgoing chief executive of Tesco

By Andrea Felsted in London and Kevin Brown in Kuala Lumpur

Published: October 28 2010 23:51 | Last updated: October 28 2010 23:51

The UK’s Tesco is among several bidders poised to submit final offers for Carrefour’s south-east Asian assets, put up for sale with a price tag of up to $1bn.

Six or seven potential acquirers are expected to submit final bids in the next week or so, although this includes offers for just some of the stores in Thailand, Malaysia and Singapore.

Tesco, the world’s third-biggest grocer by sales behind the US’s Walmart and France’s Carrefour, is thought to be interested in the assets in Thailand and Malaysia, where it has operations.

Earlier this year, Sir Terry Leahy, outgoing chief executive of Tesco, told the Financial Times that the Carrefour stores would be an obvious fit for the chain in markets where it already had a presence.

However, its interest would depend on price, he said this month when the retailer unveiled its half-year results.

Tesco is said to be working hard on the transaction, although some people with knowledge of the situation have suggested that it was not as far advanced as some other bidders.

Tesco said it did not comment on speculation.

Casino of France and Aeon of Japan are also expected to submit bids, although some reports have suggested that Aeon is only interested in the stores in Malaysia and Singapore, and will not bid for the Thai stores.

Navis Capital, a Malaysian private equity fund, is also interested in the stores in Malaysia and Singapore but is not seeking to buy the larger Thai chain, according to a person with knowledge of the transaction.

Carrefour is understood to be willing to sell the Singapore and Malaysian stores separately, either as a package or to separate bidders, but its main objective is to maximise the overall sale price by encouraging as many bidders as possible to stay in the race.

At least two other bidders are thought to remain in the race for elements of the assets. Some of the bids are understood to encompass all the stores, while others are for the 40 Thai supermarkets alone or for the 19 Malaysian and two Singapore assets together, or just the Singapore stores.

Carrefour is selling the stores because it wants to concentrate its efforts on countries in which it is market leader, rather than spreading itself too thin.

Last month, Sir Terry said Carrefour made a mistake in entering too many markets. Tesco, in contrast, had concentrated on a dozen, enabling it to capture the number one or two positions in the markets in which it operated.

Carrefour is being advised by Goldman Sachs and UBS, while Casino is being advised by Deutsche Bank. There was no comment from the banks.