Tesco has rejected a £4bn offer for its South Korean assets from an American private equity firm, it is understood.
- Tesco rejects £4bn bid from US private equity firm Carlyle
- Firm is reported to have been circling Tesco’s South Korean assets for months
- Tesco boss Dave Lewis adamant international business can turn larger profits
Carlyle, which already counts health food retailer Holland & Barrett and taxi firm Addison Lee among its British investments, has approached the grocer with an offer for its Homeplus business, according to The Sunday Times.
When contacted by Retail Week, Tesco refused to confirm or deny the offer.
The supermarket giant, which last month revealed its worst ever full-year statutory loss of £6.38bn, has more than 400 directly owned stores in South Korea, in addition to another 200 franchises. It is Tesco’s biggest market outside of the UK, serving 6 million customers every week.
Carlyle is reported to have been circling Tesco for a number of months, making its first move when Sir Richard Broadbent was chairman.
The private equity giant is understood to have submitted another proposal in March after John Allan replaced Broadbent. Tesco are said to have “kicked it into touch.”
The grocer’s Asian business raked in £10.5bn in sales at actual exchange rates during the 2014/15 financial year, but made just £565m of profit.
After unveiling the retailer’s full year results, boss Dave Lewis admitted Tesco’s international businesses have been “a challenge” but insisted they can become more profitable under new head of international Trevor Masters.