Tesco Urged to Pursue Carrefour Asian Assets With Lowball Bid

Carrefour is seeking offers for its units in Malaysia, Thailand and Singapore and Tesco is among the possible buyers, people familiar with the matter said last week. The combined operations may fetch $800 million to $1 billion, they said, a valuation that according to RBS analyst Justin Scarborough would be too high for any bidder.

“If Tesco keep putting money into their strong markets, and Thailand is clearly one, then that would be grand,” said Phil Doel, an investment manager at F&C Asset Management in London, whose funds hold about 1 percent of Tesco shares. “It depends on price and the return they can get.”

Tesco generates about a third of sales outside the U.K., where growth is slowing amid heightened competition and easing inflation. Asia accounts for about 15 percent of the retailer’s revenue and is its fastest-growing division by earnings, which rose 24 percent last year. Tesco plans to add 4.9 million square feet of new store space in the region this year.