By P.R. Venkat

 

U.K.-based retailer Tesco PLC (TSCO.LN) is seeking bids for its supermarket businesses in Asia, which have a potential value of as much as $9 billion, people familiar with the matter said Friday.

The first round of bids are due by middle of January, the people said.

Tesco declined to comment.

In December, Tesco--one of the world's largest grocers--had said that it had started reviewing options for its businesses in Thailand and Malaysia, including the possible sale of the assets.

Like some of its counterparts, Tesco has been shrinking its presence abroad to focus on its home market, where it is locked in a price battle with discount grocers and online competitors such as Amazon.com Inc. (AMZN) and Ocado Group PLC (OCDO.LN). Since 2011 it has exited markets including Japan, the U.S. and South Korea, and ceded some control of its operations in China.

For the six months to Aug. 24, Tesco's pretax profit was 494 million pounds ($649 million) compared with GBP463 million in the same period a year earlier.

Tesco's recent divestments are in line with peers such as French players Carrefour SA (CA.FR) and Casino Guichard-Perrachon SA (CO.FR), which have also exited operations in countries such as Indonesia, Thailand and Vietnam in recent years.

Tesco entered Thailand in 1998 by buying a majority stake in the Lotus Supercenter hypermarket for $365 million from Thai conglomerate Charoen Pokphand Group. Tesco Lotus now operates around 2,000 store branches in the Southeast Asian country, including hypermarkets.

People with knowledge of Tesco's bid to sell its Asia operations had said previously that the Thai segment of the business could be valued at nearly $7 billion, while the Malaysian part could be valued between $1.5 billion to $2.0 billion.

The U.K. group has operated in Malaysia since 2006 and now has 74 stores there.

Shares of Tesco have risen about 5.0% since its December statement that it was studying options for its Asia business. Shares on Thursday closed at GBP255.80.

 

Write to P.R. Venkat at venkat.pr@wsj.com

 

(END) Dow Jones Newswires

January 03, 2020 04:08 ET (09:08 GMT)

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