WILL private equity firms really be queuing up to bid for newly-lonely Asda? If reports are to be believed today, yes. If logic prevails, no.
Asda was quietly up for sale long before it won the affections of Mike Coupe at Sainsbury, yet nobody bid.
If a “PE” deal had made sense, surely someone would have done it by now. They didn’t, and shouldn’t, because the British grocery market is the most competitive, ruthlessly efficient in the world.
Without the prospect of saving on costs by merging with another supermarket, it’s hard to see how a KKR or Blackstone could get a return on their investment. Besides, Asda is already a slick operation, so there’s not much room for improvement in private equity hands.
Private equity firms are flush with cash from investors, and are set to make some big acquisitions.
But it’s hard to figure how this one makes sense.
WPP and Sorrell
SAY what you will about Sir Martin Sorrell, he has the marketing guru’s skill at manipulating the message.
Just as his creaky old shop WPP announces another dismal set of quarterly profits, he reveals two whizzy takeovers for his new venture. Coincidence? Hmm.
WPP continues working through deep troubles in the US, where key account losses — parts of Ford, GSK, United Airlines, American Express — saw sales fall 8.5%. Bosses say merging divisions is helping, but the extent of problems out there are troubling. Some worry Ford may move more of its giant account.
Sorrell’s departure was ugly, but, as it turns out, rather well-timed.
