Firms 'Pull Out' of dunnhumby Acquisition Deal

A number of firms previously hoping to buy Tesco data firm dunnhumby have pulled out of the race amidst fears about future funding, according to a report broadcast on Sky News.

The dunnhumby sale is part of Tesco's attempt to pay off some of its adjusted net debt of £8.5bn, as the supermarket giant plans £7bn of write-downs this year. Among those originally rumoured to be interesting in bidding are dunnhumby founders Edwina Dunn and Clive Humby; venture capital firm TPG; marcoms giant WPP; Nielsen; former Tesco executive and Dixons boss John Browett; and Google. Analysts initially suggested a price tag of around £2bn, but following the recent dissolution of the firm's JV with US supermarket chain Kroger, the figure is now said by many to be less than half that.

Sky News now claims that several equity firms have abandoned their offers for dunnhumby, following Tesco's announcement that whoever buys it will have to negotiate a new contract with the supermarket group within five years. More than half dunnhumby's current revenue comes from the deal with its parent, and the buyout firms are said to have asked Tesco to consider offering a longer contract with dunnhumby, in order to make their bids viable.

Companies rumoured to have either pulled out of the deal, or to be considering doing so, include Apax Partners, CVC Capital Partners, Clayton Dubilier & Rice and TPG. General Atlantic Partners, which had been involved in a joint bid with WPP, is also said to have decided against pursuing its interest. Sky News says it is unclear whether Silver Lake Partners remains in the process, although it is said to have attached a number of conditions to any prospective offer.

Web site: www.dunnhumby.com .