Buyout Firms Tap Olympics Hero For Tesco Bids

The entrepreneur who founded the Nectar loyalty programme and led London's bid to host the 2012 Olympic Games is being asked to spearhead a £2bn takeover bid for Tesco (Xetra: 852647 - news) 's customer data unit, Dunnhumby.

Sky News has learnt that Sir Keith Mills, whose other business successes include the launch of the Air Miles scheme, has been approached by a number of private equity firms about leading a bid for the division, which has been earmarked for disposal by the supermarket chain.

Sir Keith, who made tens of millions of pounds from the sale of Nectar, is understood not to have agreed to work with a specific bidder at this stage.

His prospective involvement, however, underlines the seriousness with which private equity funds are approaching the auction.

One private equity bidder said Sir Keith would be "the perfect candidate to lead a bid".

If he does proceed as part of an offer for Dunnhumby, Sir Keith is likely to find himself pitted against Sir Terry Leahy, who is working on a bid for Clayton, Dubilier & Rice, the US-based buyout firm.

Other investors including Advent International, General Atlantic Partners and KKR are also examining offers for the division, which Tesco chief executive Dave Lewis said this month could be sold or listed on the stock market.

Dozens of parties are understood to have expressed an interest in the business, although uncertainties remain over how Tesco will navigate complexities relating to contracts with other retailers, such as Kroger of the US.

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.

Last year, Dunnhumby bought Sociomantic Labs, an advertising technology firm, for a price reported to be in the region of $200m.

Tesco is close to naming a new chairman to replace Sir Richard Broadbent, who has been criticised by investors for failing to address the company's decline, which has included a series of profit warnings, the ousting of Mr Lewis's predecessor and the overstatement of profits which has sparked a Serious Fraud Office inquiry.

The private equity firms declined to comment while Sir Keith could not be reached.