Tesco prepares to sell South Korea ‘jewel’ to MBK for £4.3bn
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Version 0 of 1. The Asian private equity firm MBK Partners has emerged as the front runner to buy Tesco’s South Korean business for as much as $6.6bn (£4.3bn). MBK led a consortium which also includes South Korea’s National Pension Service, the Canada Pension Plan and Singapore’s Temasek. The disposal of the South Korean Homeplus chain, once considered the jewel in Tesco’s crown, will help the company to recover its investment-grade status. The consortium is understood to have beaten two other bidders – Affinity Equity Partners, which was working with the US giant KKR, and another US buyout specialist, Carlyle Group. The sale comes just a day after Tesco’s chief executive Dave Lewis celebrated his first anniversary of taking charge. Following the discovery of a £263m black hole in its accounts, Mr Lewis began to dispose of some of Tesco’s biggest assets earlier this year in an urgent effort to restore the balance sheet. It is also looking to sell Dunnhumby, the data business behind its Clubcard. The supermarket giant entered the South Korean market in 1999 in a joint venture with Samsung, eventually building up a network of 900 stores and buying out its local partner. But the retailer has been suffering from weak household spending in South Korea and curbs on when large stores can trade, swinging to a 330bn won (£166m) loss for the year to the end of February, from a profit the previous year. Tesco is in the process of retrenching from its global empire. Its former chief executive Philip Clarke pulled it out of Japan and the US. |