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Carrefour Said to List Tesco, Casino as Potential Unit Buyers

Lars Olofsson, CEO of Carrefour SA.
Lars Olofsson, chief executive officer of Carrefour SA. Photographer: Alastair Miller/Bloomberg

Carrefour SA, the world’s second-biggest retailer, put Tesco Plc and Casino Guichard-Perrachon SA on a shortlist of potential buyers for its Southeast Asian units, a deal that may be valued at about $1 billion, said three people with knowledge of the matter.

The potential buyers, which also include Japan’s Aeon Co., made indicative bids and will be asked to make binding offers for Carrefour’s Thailand, Malaysia and Singapore businesses around the end of October, said the people, who asked not to be identified because the talks are confidential.

Carrefour intends to sell the Southeast Asian businesses and focus on China and Indonesia. The Paris-based company plans to open 22 hypermarkets and 140 discount stores in China this year and add 13 stores in Indonesia, said Chief Executive Officer Lars Olofsson in May.

Greg Sage, a spokesman for Tesco, the U.K.’s largest supermarket chain, said the company doesn’t comment on such matters. Carrefour spokeswoman Florence Baranes-Cohen and Aeon spokesman Kenichi Suenami both declined to comment. Karine Allouis, a spokeswoman for Casino, which controls Thailand’s Big C Supercenter Pcl, didn’t immediately return calls and an e-mail seeking comment.

Earnings before interest, taxes, depreciation and amortization at Carrefour’s Thai business may rise more than 30 percent to about 2.8 billion baht ($90 million) this year, said two of the people. The Malaysia operations may post more than 20 percent earnings growth to about 128 million ringgit ($41 million), they said.

Dairy Farm

Based on the 2010 profit forecast and applying an eight times multiple, the Thai business may be worth $720 million, while Malaysia is worth about $328 million, the people said. The bidders may submit offers between seven and nine times the forecast earnings, the people said.

Hong Kong’s Dairy Farm International Holdings Ltd. and two other companies also made first-round, non-binding offers, the people said.

Dairy Farm spokeswoman Lancy Ng declined to comment.

The retailer will consider selling the units separately as potential buyers may not be interested in bidding for all three combined, people with knowledge of the matter said in July.

Carrefour is being advised on the deal by Goldman Sachs Group Inc. and UBS AG, the people said.

Asia was Carrefour’s smallest market by sales in 2009, accounting for about 7.5 percent of the total, according to the company’s website. France was the biggest, generating 43 percent, followed by the rest of Europe at 36 percent

Carrefour this year agreed to sell 40 percent of its Indonesian business to Trans Corp., forming a strategic partnership in the country. It didn’t disclose the price.

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