British retailer Tesco to sell its Thai and Malaysian business

SINGAPORE/BANGKOK, Mar 9, 2020, Bangkok Post. Charoen Pokphand (CP) Group said on Monday its board approved a deal for its subsidiaries to buy up 86.9% of the Thai business of British retailer Tesco and 100% of the retailer’s Malaysian business in a deal valued at US$10.6 billion (334 billion baht), Bangkok Post reported.

The Thai group said the transaction is subject to anti-trust approvals from Thai regulators.

Citing sources, Reuters reported on Sunday that CP was the frontrunner to buy Tesco’s Thai and Malaysian assets in a potential deal that could be worth just over $10 billion.

Following completion of the disposal, Tesco intends to return about £5 billion (208 billion baht) to shareholders via a special dividend with associated share consolidation.

A final decision by Tesco could mark the end of a three-way tussle for control of the company’s Thai operations, which comprise some 2,000 stores, said the sources, who declined to be identified as the information is confidential. Sources have said Tesco is also selling 74 outlets in Malaysia, according to the Bangkok Post.

The bidding is shaping up as a battle between Dhanin Chearavanont’s Charoen Pokphand Group, Central Group, controlled by the Chirathivat family, and beer-and-property magnate Charoen Sirivadhanabhakdi’s TCC Group, sources said.

“The end game is near,” said one banking source.

The three Thai groups did not immediately respond to a Reuters request to comment on Sunday. Tesco also did not immediately respond to a request for comment.

Three sources said bidders were given until Sunday to come up with any last-minute revisions to their bids.

They said CP Group, which had sold its supermarket chain to Tesco during the Asian 1997-98 financial crisis, was the frontrunner.

Britain’s biggest retailer said in December it started a review of its Asian operations, made up mainly of the Thai and Malaysian operations, after receiving interest.

Sources have also said antitrust concerns could pose a challenge to bidders as Thailand’s antitrust office said last month that the deal should not violate anti-monopoly laws.

The Financial Times reported earlier on Sunday that Tesco’s board was set to meet this weekend to finalise plans to sell the UK supermarket chain’s Thai and Malaysian operations.