More Food for Thought for dunnhumby Suitors

Potential buyers for Tesco's consumer data company dunnhumby will have to negotiate a new contract with the supermarket group within five years, according to reports from Sky News. More than half dunnhumby's current revenue comes from the deal with its parent.

Sky sources say a new deal, expiring in 2020, has been struck between Tesco and its data-crunching subsidiary in recent weeks, and that the Tesco business accounts for 'a large chunk of Dunnhumby's profitability'. dunnhumby sales in the year to February were reportedly around £440m, or £350m after removing sales from the firm's JV with US supermarket chain Kroger, recently dissolved.

A very long list of potential bidders has been discussed over recent weeks, and Sky suggests this may have been whittled down now to a few, including WPP Group / General Atlantic; Google / Permira; Apax Partners and CVC Capital. Sky also mentions rumours that the sale 'could be abandoned', but adds that 'a Tesco insider said they were unaware of any such plan'.

Web site: www.dunnhumby.com .