Google Enters Fray For Tesco Loyalty Unit

The technology giant Google is drawing up secret plans to gatecrash the auction of Tesco’s customer loyalty arm by exploring a joint takeover bid with one of the UK’s biggest buyout firms.

Google is in talks with Permira about making a combined offer for Dunnhumby, the sale of which Tesco hopes will help to rebuild its battered balance sheet.
It is unclear whether Google’s interest was being handled through its main corporate entity or through another unit such as

Google Capital, a growth equity fund backed by the US-based company.
Either way, Google’s association with the auction is likely to add renewed competitive tension to a process which was perceived to have become less attractive to prospective buyers following the restructuring of an arrangement between Dunnhumby and Kroger, its US partner.

Permira’s Silicon Valley-based team has worked with Google before, notably on their joint ownership of Renaissance Learning, an assessment and educational analytics business, which has a presence in thousands of American schools.
It is unclear what commercial arrangements Google and Permira would strike in relation to the ownership of Dunnhumby if their bid progresses and is ultimately successful.

The US giant, which is facing regulatory pressure in Europe and elsewhere on its core search business, is only one of a number of big players in the marketing and technology industries, which are keen to get their hands on Dunnhumby.
WPP Group, the marketing services company headed by Sir Martin Sorrell, has teamed up with General Atlantic Partners to mount a joint bid.

Other big names with an interest in the auction include John Browett, a former Tesco executive who has been talking to Apax Partners, another buyout firm, about buying Dunnhumby.

The data unit’s value was originally mooted to be in the region of £2bn, but some bankers say the business is worth substantially less than half that sum.
Sky: http://bit.ly/1BlBaRc