Private equity bidders for Turkish retailer Migros received an unexpected boost as trade buyer Carrefour, the world’s second largest chain, pulled out of the auction, according to its spokeswoman.
Turkish conglomerate Koc Group is selling Migros and bids are expected tomorrow in the region of $4 billion (€2.7 billion), according to two sources close to interested private equity bidders.
US buyout firm Kohlberg Kravis Roberts is set to table a bid for the retailer, while European rival BC Partners is putting together a rival bid alongside Turkish firm Turkven, according to the two sources. US buyout firm Bain Capital and Croatian trade buyer Agrokor are also interested in bidding for the firm, according to media reports.
Carrefour attempted to table a bid at this value upon the condition of exclusivity late last year, according to the UK newspaper Financial Times.
The trade buyer’s decision is in contrast to numerous recent auctions where financial sponsors have lost out to reinvigorated corporates in the wake of the worldwide problems in the credit markets during the last six months.
The resurgence of trade buyers has contributed to the sharp drop in buyout volume worldwide on the back of the credit squeeze. At the beginning of last month, despite widespread private equity interest in the three divisions of media group Emap, the company sold its consumer magazine and radio business to German trade buyer H Bauer for £1.14 billion (€1.53 billion; $2.25 billion).
European buyout firm Apax Partners managed to secure the company’s business to business division two weeks later with a sweetened £1 billion bid in partnership with a trade buyer – Guardian Media Group.