Potential Buyers of Tesco's dunnhumby Back Away
UNITED KINGDOM - With rumors of a significantly shorter buyer list for Tesco's dunnhumby, as well as the possibility that the UK-based retailer could only receive one-third of the originally anticipated price, the sale of the data firm is shaking up.
As we have previously covered, Kroger revisited its deal with Tesco earlier this year in regards to the North American counterpart of the data firm, dunnhumbyUSA, purchasing a majority stake and renaming the company to 84.51°. Now, Sky News reports, this plan could cut the originally anticipated £2 billion (about $3.07 billion) into about one third the profit.
To understand more about what dunnhumby is, watch the brief vieo below.
Tesco has reportedly announced that whoever purchases the firm will also have to negotiate with Kroger in the next five years, the parent responsible for more than half of dunnhumby’s current revenue.
The possible elusiveness of future funds has reportedly cut the list of interested parties. While it has not been confirmed who is out of the race and who’s in, rumored inquiring shoppers previously included:
- Nielsen
- Former Tesco Executive and head of Dixons John Browett
- dunnhumby Founders Edwina Dunn and Clive Humby
- WPP
- TPG
While one bidder told Sky View that Tesco made an “aggressive” forecast for the data firm with a suggested possibility of a nearly £1 billion (about $1.5 billion) growth in revenue and almost £200 million (nearly $308 million) in profit by 2020, firms reportedly requested that Tesco offer a longer contract with dunnhumby to make bids more practical.
Those that could possibly have backed away from bidding, according to the report, but have not been confirmed are:
- Apax Partners
- CVC Capital Partners
- Clayton Dubilier & Rice
General Atlantic Partners, who have been in a joint bid with WPP, and Silver Lake Partners are also reportedly on the fence.
AndNowUKnow will continue to follow this story as it develops.