WPP Team Up With General Atlantic on Tesco Clubcard Bid
WPP Plc, the world’s largest advertising and marketing agency, has reportedly teamed up with private-equity firm General Atlantic to bid for Dunnhumby, the business that developed Tesco Plc’s Clubcard loyalty program, according to people familiar with the matter.
The two firms are among those that submitted offers last week for the business, which tracks customer purchases and then sells the information to companies, said the people, who asked not to be identified because the information is private. Other bidders include Advent International and Warburg Pincus, the people said. Permira Advisers, which may team up with Google Inc., also bid, they said.
Tesco hired Goldman Sachs Group Inc. to explore options for Dunnhumby, including a sale, in January. The original 2 billion- pound ($3.1 billion) price tag has since been lowered to closer to 1 billion pounds due to concerns that once the operation is no longer part of Tesco it will be less attractive to clients such as Coca Cola Co., the people said.
American supermarket chain Kroger Co. in April agreed to acquire Dunnhumby USA’s data-mining technology and more than 500 of its staff. Tesco’s loss of those sales could also reduce the price for Dunnhumby, one of the people said.
Tesco, the U.K.’s biggest supermarket company, is selling assets and shutting stores to cut costs and reduce 21.7 billion pounds of debt. The grocer may retain a minority stake in Dunnhumby as part of any deal, two of the people said.
Spokesmen for Tesco, WPP, General Atlantic, Permira, Google and Warburg Pincus declined to comment. A representative for Advent did not respond to an e-mail request seeking comment.
Bloomberg News, edited by ESM