Tesco is facing pressure to cut the price it’s seeking for the business that developed its clubcard loyalty program, people with knowledge of the talks said.
Warburg Pincus, the private-equity firm that invested in the rival Nectar card loyalty program, Carlyle Group and TPG are among those to have shown interest in Tesco’s Dunnhumby unit, said the people, who asked not to be identified because they weren’t authorized to speak publicly.
Still, the potential buyers are concerned the £2 billion Tesco is asking for the operation is too much because once Dunnhumby stops being part of Tesco, Britain’s biggest retailer, it risks becoming less attractive to companies such as Coca-Cola. and Procter & Gamble, the people said. Dunnhumby provides data on the buying habits of 700 million shoppers worldwide.
Tesco is seeking to revive earnings after the company’s shares fell 43 per cent last year amid increased competition from German discounters and a £263 million profit overstatement that led to a fraud investigation. The retailer, led by Dave Lewis, is selling assets and shutting dozens of unprofitable stores as part of a cost-cutting plan.
Tesco said last month it had hired Goldman Sachs Group Inc. to explore a sale or initial public offering of the unit. “There’s absolutely no way in the world or need at all for there to be a fire sale of Tesco assets,” Lewis said at a news conference in January.
