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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Tesco PLC    TSCO   GB0008847096

TESCO PLC

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Tesco Weighs Sale of Supermarkets in Thailand and Malaysia

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12/08/2019 | 08:01am EST

By P.R. Venkat

U.K.--based retailer Tesco PLC is considering selling its supermarket businesses in Thailand and Malaysia, in deals that could value those operations at up to $9 billion, people with knowledge of the plans said.

Tesco, one of the world's largest grocers, is potentially working with an adviser for a sale of the assets, the people said. One of the people said that Tesco could start a sale process early next year.

However, the plans are at a preliminary stage, and a deal might not materialize, the people warned.

Tesco said in a statement that it confirmed that, following inbound interest, it had commenced a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses.

"The evaluation of strategic options is at an early stage, no decisions concerning the future of Tesco Thailand or Malaysia have been taken, and there can be no assurance that any transaction will be concluded. A further announcement will be made if and when appropriate," the statement said.

Tesco, like some counterparts, has been shrinking abroad to focus on its home market, where it is combating discount grocers and online competitors such as Amazon.com Inc. Since 2011 it has exited markets including Japan, the U.S. and South Korea, and has ceded some control of its operations in China.

For the six months to Aug. 24, Tesco's pretax profit was GBP494 million (US$649 million), compared with GBP463 million a year earlier.

Tesco's recent divestments are in line with its peers such as Carrefour SA, and Groupe SA of France, which also in recent years have exited operations in countries such as Indonesia, Thailand and Vietnam.

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

People with knowledge of the process said the Thai business could be valued at nearly $7 billion as it includes real-estate assets.

Tesco has operated in Malaysia since 2006 and now has 74 stores there. A person with knowledge of the process said the Malaysian business could be valued at $1.5 billion to $2.0 billion.

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

Stocks mentioned in the article
ChangeLast1st jan.
CARREFOUR 5.47% 15.415 Real-time Quote.-2.21%
TESCO PLC 2.39% 249 Delayed Quote.-4.78%
VIETNAM HOLDING LIMITED 0.70% 174.72 Delayed Quote.-1.42%
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Financials (GBP)
Sales 2020 64 427 M
EBIT 2020 2 971 M
Net income 2020 1 453 M
Debt 2020 12 108 M
Yield 2020 3,40%
P/E ratio 2020 16,2x
P/E ratio 2021 13,7x
EV / Sales2020 0,56x
EV / Sales2021 0,54x
Capitalization 23 657 M
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Number of Analysts 20
Average target price 277,23  GBp
Last Close Price 243,00  GBp
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David John Lewis Group Chief Executive Officer & Director
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