Retailer Tesco PLC has picked Asian private-equity firm MBK Partners LP as the preferred bidder to buy its South Korea retail operations—its largest outside the U. K.— in a deal that could be worth between $6 billion and $7 billion, according to a person familiar with the situation.

A sale by Tesco, if completed, would jettison a big chunk of Tesco's global operations after a series of blunders at the U.K. retail chain including an accounting scandal, massive write-downs, and upheaval in its management ranks. Tesco is counting on the proceeds from the sale, which could include a dividend being paid out from the South Korean business, to help fund its turnaround effort.

The deal will be among the largest transactions in Asia this year and a landmark private equity deal in South Korea. MBK Partners, which manages around $8.2 billion in assets, was founded in 2005 by a group of former Carlyle Group LP executives.

MBK has been competing for the Tesco business in South Korea, known as Homeplus, with a joint bid from KKR & Co. and Affinity Equity Partners, according to people familiar with the situation. MBK had initially teamed up with Goldman Sachs Group Inc. in its bid, but Goldman later withdrew from the bidding consortium, according to one person familiar with the situation.

Write to Rick Carew at rick.carew@wsj.com

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(END) Dow Jones Newswires

September 02, 2015 03:45 ET (07:45 GMT)

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