Tesco struggles to agree price for Dunnhumby sale but plans to offload central and eastern European business

Endaba Group

Tesco’s sale of Dunnhumby to advertising agency WPP is proving difficult, as they are struggling to agree a price for the business which created the grocer’s Clubcard loyalty scheme. Tesco bosses are looking to alleviate this with the sale of its eastern European stores, which could garner up to £3bn.

WPP has raised concerns about Tesco’s contract with Dunnhumby, which is up for review in 2020. Other bidders raised their doubts about the data business’ ability to grow in the US, as Kroger, US supermarket chain, acquired most of its US operation in April. the sale, which was originally estimated to be around £2bn, could now be as little as £50m.

Chief Executive Dave Lewis has made Tesco’s balance sheet a priority since he took the helm last September in order to aid the £22bn hole. Recently, Lewis offloaded their Korean Homeplus business to MBK Partners for £4.2bn, which was Asia’s largest ever private equity deal. He is already eager to go ahead with the sale of its eastern European operations to reach that strategic aim. A host of private equity firms have  expressed interest Tesco looks to sell its Polish, Czech Republic and Slovakian businesses.