Home plus up for sale

By Park Si-soo

Home plus, owned by British retail giant Tesco, has been put up for sale.

The firm has hired HSBC Holdings as lead manager for the sale. Tesco is expected to get more than $5 billion from the sale.

The company is weighing options including a sale or initial public offering of Home plus, according to Bloomberg.

Tesco is working with advisers, including HSBC, on the process, it reported, citing unidentified sources and adding that no final decision had been made on how to proceed.

Reuters reported that Tesco plans to sell its Korean business in Hong Kong.

Private equity firms such as KKR, Carlyle, CVC and TPG, as well as Asian buyout firms, including Seoul-based MBK Partners, could be interested bidders in the Korean business, according to Reuters.

A potential sale of Home plus comes after Tesco reported the biggest loss in British retail history in April and saw its credit rating cut to junk status by Moody’s and S&P at the start of the year.

Tesco is also working with bankers at Goldman Sachs to drum up interest in its customer data business, Dunhunmby.

There has been intense speculation that Dave Lewis, who has been overhauling the business since joining last year as chief executive from consumer giant Unilever, could offload the Korean business to fund a turnaround in the U.K.

Tesco has more than 400 stores in Korea under the Home plus brand, as well as substantial operations in Thailand and Malaysia.

Seven years ago, Tesco’s then Chief Executive, Terry Leahy, identified Korea as a “key area for growth” and pressed firmly ahead with an expansion plan that saw it make big investments to buy a chain of supermarkets. The supermarket chain first entered the region in 1999, following a deal with Samsung Group.