Further scaling back overseas could see more resources to invest in the UK supermarket battle
Tesco (TSCO) considers checking out of Thailand and Malaysia
- Analysts estimate businesses could be worth up to £7bn and a sale could lead to a return to shareholders either through share buybacks or a special dividend
- The prospect of a possibly significant return led to the shares rising 5% in early trading today
- Recommendation: Even if no sale ultimately takes place the company has benefited from a good turnaround thanks to a revised strategy and so we maintain our ‘Hold’ recommendation
Following inbound interest, the supermarket giant has confirmed it’s considering strategic options for its Thai and Malaysian businesses, one option being a possible sale. The Asian operations have seen some good growth in recent years so any sale would make the company ever more dependent on its core UK market. Any sale would represent a further scaling back of Tesco’s overseas ambitions but it would provide the group with more resources to invest in the UK and take on the battle with the discounters Aldi and Lidl.
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