Tesco Plc investors want the UK’s largest retailer to bid for Carrefour’s Southeast Asian supermarket assets. Just not at the indicated price.
Carrefour is seeking offers for its units in Malaysia, Thailand and Singapore and Tesco is among the possible buyers, people familiar with the matter said last week. The combined operations could fetch $800 million to $1 billion, a valuation that would be too high for any bidder, said RBS analyst Justin Scarborough.
“If Tesco keeps putting money into their strong markets, and Thailand is clearly one, then that would be grand,” said Phil Doel, an investment manager at F&C Asset Management in London, whose funds hold about one percent of Tesco shares.
“It depends on price and the return they can get.”
Tesco generates about one-third of its sales outside the UK, where growth is slowing amid heightened competition and easing inflation. Asia accounts for about 15% of the retailer’s revenue and is its fastest-growing division by earnings, which rose by 24% last year.
Tesco plans to add 460,000 square metres of new store space in the region this year. — Bangkok Post