Yahoo Finance Ex-Tesco Exec Browett Eyes Dunnhumby Offer
John Browett, a former Tesco (Xetra: 852647 - news) executive who was regarded as a contender to take over at Britain's biggest retailer, is being courted to join a takeover bid for its Clubcard loyalty arm.
Sky News has learnt that Mr Browett, who recently stepped down as chief executive of the fashion retailer Monsoon, is in talks with Apax Partners, the buyout firm, about an offer for Dunnhumby.
It is not clear whether a formal agreement between them has been reached, with Apax also said to be in talks with another former Tesco executive about joining its prospective management team.
Mr Browett is a well-known figure in the UK retail sector, having run Dixons Retail and Monsoon after leaving Tesco in 2007.
He also had a brief stint running Apple (NasdaqGS: AAPL - news) 's global retail operations, but left the role abruptly.
The news of Mr Browett's talks with Apax come just days after Sky News revealed that bidders for Dunnhumby had slashed the value of their offers following the restructuring of an agreement with the division's US retail partner, Kroger.
Dunnhumby's value was originally mooted to be in the region of £2bn, but some bankers say the business is worth less than half that sum.
Tesco has declined to comment on Dunnhumby's profitability although one insider said that £70m was "in the right ballpark".
The retailer, which is rebuilding in the wake of a £6.4bn annual loss for last year - one of the biggest in UK corporate history - has signalled to bidders that it is prepared to sell its entire interest in Dunnhumby.
Dave Lewis, Tesco's chief executive, is also exploring the sale of its Korean retail operations as he attempts to get Tesco back into shape.
The company issued a statement in April announcing that it had altered the division's relationship with Kroger but did not disclose the impact on Dunnhumby's profitability.
It said that Dunnhumby, which has offices in 29 countries, had "opened the way to work with other North American retailers and FMCG (fast-moving consumer goods) clients following a restructuring of its relationship with The Kroger Co (NYSE: KR - news) ".
A Tesco insider said that the potential uplift to Dunnhumby's future earnings from the opportunity to work with other US clients would also have to be taken into account by prospective buyers.
Other prospective buyers include WPP Group, which is working with the buyout firm General Atlantic Partners, and other private equity firms such as Hellman & Friedman, TPG Capital and Clayton Dubilier & Rice, where the former Tesco chief executive Sir Terry Leahy is a partner.
Dunnhumby was a crucial architect of Tesco's Clubcard scheme and the role it played in catapulting the supermarket chain into a market-leading position in the UK during the 1990s.
After Tesco took full control of the business in 2004, Dunnhumby expanded rapidly, signing up retailers around the world as clients and now counting companies such as Coca-Cola, Procter & Gamble and Shell (LSE: RDSB.L - news) as customers.
Dunnhumby was founded by Edwina Dunn and Clive Humby, a husband-and-wife team now regarded as having created one of the UK's most successful business start-ups of the last 25 years.
