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Showing posts from October, 2015

Has the botched sale of dunnhumby cost Tesco shareholders $1 billion?

Has the botched sale of dunnhumby cost Tesco shareholders $1 billion ? Normally if you choose not to sell an income producing asset at least you get the consolation of keeping the income stream. A potential cash windfall is offset by continued and hopefully growing earnings. But that won't be the case for Tesco who, according to observer estimates,  have given away income of about £50m per year to their former JV partner Kroger. They did this because Kroger had a change of ownership clause which was triggerable if dunnhumby came under new ownership. By negotiating an exit from the Jv and keeping all of the necessary people and technology they require, Kroger are able to continue to benefit from the services that dunnhumby were providing them but without having to pay fees to the UK organisation. As a quid pro quo,Kroger enabled dunnhumby to continue with a small US operation, search for another USA grocery partner and to be sold to a 3rd party. The agreement has cost T