Tesco's Dunnhumby suitors said to have abandoned auction

8th Sep 2015 12:30

(ShareCast News) - Private equity firms have reportedly abandoned their offers for Tesco's data arm, Dunnhumby, after the retailer struck a deal with the unit that raised concerns over financing.According to Sky News, buyout groups including Apax Partners, CVC Capital Partners, Clayton Dubilier & Rice and TPG are losing interest or no longer in the frame for the acquisition, which is now valued at under £1bn - less than half original estimates.Sky cited people familiar with the matter as saying that General Atlantic Partners, which had been involved in a joint bid with marketing services giant WPP, has decided not to pursue a deal.Tesco recently struck a five-year agreement with the unit which manages its Clubcard loyalty scheme. However, that deal expires in 2020 meaning that a new owner will have to secure another deal with the company which currently accounts for more than half of Dunnhumby's revenues.A number of private equity bidders withdrew on the basis of that deal, having struggled to secure acceptable borrowing terms from banks.The news come a day after Tesco announced the sale of its South Korean unit, Homeplus, to a consortium led by MBK Partners for £4.24bn.Tesco said the deal, which is expected to complete in the fourth quarter, will allow it to significantly reduce its £4.23bn debt pile.Reports on Monday also said that Tesco was exploring a potential sale of its central and eastern Europe business.