(MergerMarket) Tesco’s Asian assets could be parcelled out by country, sources s

Tesco’s Asian assets could be parcelled out by country, sources say

Tesco’s [LON:TSCO] Asian assets could easily be sold along geographic lines in the region, industry sources following the situation told this news service.

But suitors may have to wait until the grocer has more clarity on its overall group direction before it will embark on any sell-down, they said.

Tesco has a number of options in Asia because its businesses there are run separately, the sources said. This means it could hold onto operations in one or more countries, the sources said.

Some news reports have suggested Tesco might look to sell the combined operations in Thailand, Malaysia and South Korea in one package. However, industry sources played down the likelihood a bidder would buy the operations as a whole, saying interested suitors exist in each country.

If a deal for the whole package does emerge, it could be in the form of a sovereign wealth fund or private equity sponsor taking a stake in the operations, sources said. One pointed to Temasek’s purchase of a stake in Hong Kong's AS Watson as an example.

The Asian businesses accounted for 16% of group revenue and 21% of profit last year, according to Tesco’s 2014 annual report. The Asian operations include a 50:50 joint venture in India and a 20% ownership stake in a Chinese joint venture with China Resources Enterprise [HK:0291].

Tesco’s Homeplus discount operation in South Korea is the largest of the three being eyed by bankers. Large global private equity sponsors such as TPG, KKR and Carlyle will likely take a look at Homeplus, a second source said, adding that local groups like IMM Private Equity should also be interested.

Samsung’s involvement in setting up Homeplus in South Korea with Tesco could see the conglomerate as the first port of call, a third source said. Other potential buyers could include GS Retail [KRX:007070], Lotte Shopping [KRX:023530] and Hyundai Department Store [KRX:069960], sources said. The country’s largest player, Shinsegae [KRX:004170], may face antitrust issues should it acquire Homeplus, they said.

But its position as a large segment within the group might mean Tesco would hesitate before accepting any offer for the Korean business, the second source said. One report noted the operations might be valued at KRW 7trn (GBP 4bn). Homeplus, wholly-owned by Tesco, operates 106 hypermarkets and 492 express supermarkets in Korea. It has two subsidiaries- Homeplus Tesco and Homeplus Bakery.

In Malaysia, Tesco owns 70% of Tesco Stores (Malaysia). Local conglomerate Sime Darby [KLSE:SIME] owns the remaining 30%.

Dairy Farm International Holding [SGX:D01] might look at Tesco’s Malaysian operations, the third industry source said. Dairy Farm is a dominant player in Southeast Asia, and tends to review any supermarket asset that comes into play in the region.

Private equity sponsors should also show interest in Tesco’s Thai operations, sources said. Global industry leader Walmart might also be keen to look at the operations, the third source said. Central and Berli Jucker [BKK:BJC] could also be interested, a fourth source said.

The potential divestment drive is one of the most-watched situations by local bankers positioning for mandates, sources said, adding that any sale process might have to wait until the New Year. Tesco has a February year-end for its annual accounts, the fifth industry source noted.

Tesco might announce any advisory appointment for strategic options for the assets in late November, one of the industry sources speculated.

A person familiar with Credit Suisse in Asia said the bank has not been mandated to sell the Korean business Homeplus, contrary to a local media report. Morgan Stanley is a strong contender for a mandate, the second source said.

Tesco will not want to rush into selling the assets as it sorts through an accounting scandal in the UK and reviews how much capital it will require to shore up its balance sheet, sources said.

A decision as big as exiting Asia will not be taken likely, they said.

An initial announcement may be that the Group is conducting a strategic review of all its operations in the region, the second industry source said.

by Alex Tarrant, Patricia Heiberger, Soo Young Park, and

>>> Germany eyes sale of stakes in Deutsche Telekom, Post

Germany eyes sale of stakes in Deutsche Telekom, Post - document DBN.UL DPWGn.DE DTEGn.DE - RTRS

11-Nov-2014 10:18 BERLIN, Nov 11 (Reuters) - The German government is considering reducing its stakes in Deutsche Telekom DTEGn.DE and Deutsche Post DPWGn.DE, and could revive the idea of selling shares in rail operator Deutsche Bahn depending on market conditions, according to a finance ministry document seen by Reuters.

The document, to be presented to Chancellor Angela Merkel's cabinet on Wednesday, sketches out plans for the government's holdings in a range of companies.

It says a further sale of Berlin's stake in Deutsche Telekom should be "carefully examined". The government currently has a 14.3 percent direct stake in the telecommunications operator, while state bank KfW owns a further 17 percent.

Deutsche Post, Deutsche Bahn and the Berlin, Cologne/Bonn and Munich airports are also listed as candidates for government stake sales, although the document makes clear that a privatisation of the Bahn would depend on the company's situation and market conditions. It would also exclude the company's rail infrastructure.

After the global finance crisis erupted in 2008, the government cancelled plans to sell a stake in Deutsche Bahn.

The report on government holdings was last published in 2012. It did not list any deadlines for the sale of stakes.

(Valor) Brazilian side of Oi want Altice

Representatives of the Brazilian shareholders of Hi are in Lisbon to discuss proposals for purchase of Portugal Telecom and the French Altice is considered the strongest. The decision may be announced in the near term. The Hi hurry because the sale can bring you breath to advance the strategy designed by the bank BTG Pactual to buy TIM Brazil and divide it with Claro and Telefonica.

© 2000 – 2014. Todos os direitos reservados ao Valor Econômico S.A. . Verifique nossos Termos de Uso em http://www.valor.com.br/termos-de-uso. Este material não pode ser publicado, reescrito, redistribuído ou transmitido por broadcast sem autorização do Valor Econômico.

Leia mais em:

(BFW) Oi Brazilian Shareholders May Favor Altice Bid for Assets: Valor

Oi Brazilian Shareholders May Favor Altice Bid for Assets: Valor
2014-11-11 08:56:24.690 GMT


By Katerina Petroff
Nov. 11 (Bloomberg) -- Representatives of Oi’s Brazilian
shareholders are in Lisbon to discuss bids for Portuguese
assets, Valor Economico reports, without saying how it got the
information.
* Decision may be announced in short term
* NOTE: Altice Offers $8.8b for Oi’s Portuguese Telecom Assets
* NOTE: Angolan President’s Daughter Offers to Buy Portugal
Telecom


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Katerina Petroff in London at +44-20-3525-0733 or
kpetroff@bloomberg.net
To contact the editors responsible for this story:
Giulia Camillo at +55-11-2395-9177 or
gcamillo@bloomberg.net
Leonardo Lara