Plans by supermarket giant Tesco to offload its data arm, Dunnhumby, are on the verge of being scrapped following disagreements over its value.
Sources reporting to the Sunday Times say a deal involving advertising agency WPP which first came to light in January of this year could be in jeopardy, with Tesco standing firm on its valuation.
Bankers had Dunnhumby as a £2 billion business in May amid reports that its owner would look to attract a suitable majority shareholder whilst staying involved in the business.
But with its asset’s value dropping down to a reported £500 million, Tesco may well reassess the “very difficult changes” it was forced into making after a slump in general business across Europe.
Exploring other avenues
Dunnhumby specialises in helping brands breed loyalty around their organisations: analysing banks of customer data to discover their wants and needs and generating personalised offline and online experiences off the back of it.
This fits in line with what many retailers are looking to do around their businesses in 2015, and reports of Tesco wanting to retain a stake in the firm shows it to be applying a degree of faith into the company which helped develop the group’s long-standing Clubcard scheme.
Some of the biggest names in tech and advertising have been touted as suitors for Dunnhumby, with Google, Permira, WPP and Apax Partners all being mentioned.
However, questions have arisen over the group’s true value, which has fluctuated massively in recent months. Tesco is now said to be exploring other ways of generating cash after the struggle to find a suitable home for its data division.
The Sunday Times says that a sale of several Tesco stores across eastern Europe could raise a hefty £3 billion for the group as it battles a 6% drop in annual trading profit from last year.