Google is contemplating teaming up with Permira, a British private equity firm and also the former owner of Hugo Boss, in order to launch a bid for Dunnhumby. For those not in the know, Dunnhumby is the force behind Tesco’s Clubcard. Dunnhumby basically goes through your shopping cart and by doing so can work out if you’re single, a fast-food junkie or a family on a tight budget.
Google is not the only one though. It is believed that there exists a list of 10 parties who are considering a bid for Dunnhumby within the next month. The list, aptly titled “The longlist”, will receive data on Dunnhumby within the coming weeks and first round bids are scheduled to be filed by the end of July. Mind you the company is valued at around £2bn.
The primary reason for Tesco to sell off Dunnhumby is as part of its bid to raise up to £5bn to work out the company’s balance sheet after a loss of profits and also a £263m accounting scandal last year. As of 2014, Tesco made a £6.4bn annual loss which is thus far the biggest ever recorded by a British retailer, and to make matters worse, it all happened whilst a supermarket price war waged largely due to the rise of discounter supermarkets such as Aldi and Lidl.
In addition, Tesco is also selling off its Korean chain Homeplus (worth around £4bn), and has already relieved itself of its Blinkbox film and music streaming businesses.
WPP Group and Nielsen have also shown considerable interest in Dunnhumby. That’s not all though. A number of private equity firms have also shown interest in the company. Among them are Apax Partners, Hellman & Friedman, Bain Capital, Blackstone, Advent International, TPG and CVC.