Charoen Pokphand Group Denies $10 Billion Buyback of Tesco's Thai Unit

   By Warangkana Chomchuen 
 

BANGKOK--Charoen Pokphand Group, Thailand's leading conglomerate, on Monday denied reports that it was considering buying back a local supermarket chain from British retailer Tesco PLC (TSCDY).

"The reports in the media had no ground," Dhanin Chearavanont, chairman and CEO of CP Group, said at a news briefing.

Reports by Reuters last week said Mr. Dhanin, Thailand's second-richest man as ranked by Forbes, had informal talks with a domestic bank to explore financial options to bid for Tesco Lotus, the Thai unit of Tesco, valued now at about $10 billion.

The British retailer was embroiled in an accounting scandal and weak sales, which may force it to sell assets to repay debt, Reuters said.

"I'm not certain if Tesco has to sell [its Thai business]. Tesco's financial position is still strong," Mr. Dhanin said. "I haven't heard that it wants to sell."

But Mr. Dhanin said he would be interested in buying Tesco Lotus if it was up for sale to strengthen CP Group's retail arm, CP All PCL, which operates almost 7,000 7-Eleven convenience stores and wholesaler Siam Makro.

Mr. Dhanin's CP Group sold its holdings in Siam Makro, where it was the biggest shareholder, and Lotus Supercenter in the aftermath of the 1997 Asian financial crisis and the crash of the Thai baht.

Mr. Dhanin bought back Siam Makro PCL for $6.6 billion last year from Dutch firm SHV Holdings.

Buying Tesco Lotus will cost more because it is a bigger business, Mr. Dhanin said.

"It's like my child. I've brought it up and I'm attached to it," he said.

Write to Warangkana Chomchuen at [e-mail]

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