The asking price for dunnhumby, Tesco's loyalty arm, could now be as low as £700 million, according to the Financial Times.
According to the paper, potential bidders for the business were discouraged by 'lower than expected earnings and difficulties financing a deal'.
When dunnhumby was put up for sale earlier this year, it was thought the business could sell for as much as £2 billion. It is understood that advertising giant WPP is still seen as a potential suitor for the business, along with private equity firms such as CVC, General Atlantic and TPG.
Commenting on the report, Barclays European food Retail Equity Research said, "There do seem to be a large number of potentially interest bidders, which at least means there should be a good degree of competitive tension, and this should enable Tesco to achieve the best price possible – whatever that turns out to be."
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.