Contract blow for DunnHumby suitors

Bidders for DunnHumby have been hit by a sneaky get-out clause after Tesco bosses have insisted the successful buyer will have to renegotiate the contract to handle Clubcard data within five years of signing the deal.
According to a report by Sky News, with the sell-off imminent, Tesco has just struck a revised agreement with DunnHumby over its use of the supermarket’s customers shopping data.
That deal will expire in 2020, meaning that a new owner will have to secure another contract with Tesco. The move is likely to slash the amount of money bidders will want to pay further as Tesco currently accounts for more than half of DunnHumby’s revenue.
According to one insider, in the year to February, DunnHumby recorded sales of about £440m including its Kroger client, and close to £350m excluding that contract. Kroger recently ended its relationship with the data giant, in a move which has already slashed its value in half.
Pre-tax profits were £60m without Kroger, with Tesco accounting for a large chunk of DunnHumby’s finances.
However, Tesco insists that DunnHumby could build sales to nearly £1bn and profit to almost £200m on the back of new client contracts by 2020, according to the insider.
Bids went in a fortnight ago, and are believed to include offers from WPP Group with General Atlantic, Permira with Google; and Apax Partners and CVC Capital, which are said to be bidding independently.

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