The retail unit of Thailand's biggest energy company PTT plans to bid for Tesco Plc's Asia businesses, competing with other Thai corporate heavyweights for the operations worth up to $9 billion, people familiar with the situation said.
PTTOR, the unit which runs PTT's gas stations and related retail business, is set to join domestic retailer Central Group and conglomerate Charoen Pokphand (CP) Group in first-round bids due by Jan. 15, they said.
Tesco last month said it had begun a review of its Asian operations after receiving approaches for the businesses. It has 1,967 stores in Thailand and 74 in Malaysia.
Bernstein analysts have valued the Asian business at £6.5 billion to £7.2 billion ($8.3 billion-$9.2 billion), and sources said "people were comfortable with" that range.
The people declined to be identified as the information is confidential. Representatives for PTT, Central Group and CP Group did not respond to requests for comment. Tesco declined comment.
PTT retail unit's interest comes amid a rare warning from Thailand's Office of Trade Competition Commission that businesses wishing to bid for the Thai operations should not violate anti-monopoly laws and that the commission is monitoring the deal closely.
"There was no precedent that the anti-trust regulator would voice concern before a transaction takes place," said one person familiar with the situation.
A $9 billion price tag would rank the deal as the second-largest acquisition ever by a Thai group, just behind CP Group's $9.4 billion purchase of a minority stake in China's Ping An Insurance, according to Refinitiv data.
At that valuation, the Thai portion of the business would have an enterprise value of 11 times EBITDA, one person said.
By comparison, the sale of a majority stake in hypermarket operator Big C Supercenter, Tesco's main Thai competitor, by France's Casino to Thailand's TCC Group for 3.1 billion euros, yielded a multiple of 15-16 times, analysts said.
Two sources said there is likely to be interest from international bidders, including Japanese firms, but the Thais were frontrunners to buy the assets.
One of the biggest players in Thailand's retail market, Tesco has some 400 supermarkets and hypermarkets under its Tesco Lotus brand and 1,500 Tesco Express convenience stores.
CP All, a unit of CP Group, has more than 11,600 7-Eleven stores in the country and also owns cash-and-carry wholesaler Siam Makro Pcl. Central Group, controlled by the Chirathivat family, runs 200 supermarkets in Thailand. The group does not own any hypermarkets in the country.
TCC has expressed interest in Tesco's assets but is not expected to be a serious contender due to overlapping businesses, the people said. TCC did not respond to a request for comment.