Turkey's Begendik to buy Tesco stores, looks at stock market listing

CarrefourSA Carrefour Sabanci Ticaret Merkezi

18/09/2015 14:46

* Turkish retail competitive market for foreigners 
    * Local player Begendik to buy stores from Tesco 
    * Talking to foreign funds, including in Iran 
 
    By Ceyda Caglayan 
    ISTANBUL, Sept 18 (Reuters) - Turkish food retailer Begendik 
plans to buy 10 stores from rival Tesco Kipa  KISPA.IS  this 
year, its CEO said on Friday, part of expansion plans that could 
lead to a tie-up with a foreign investor, potentially from Iran, 
and a stock market listing. 
    Turkey has been hobbled by slowing economic growth, 
political uncertainty and a worsening security situation, but it 
remains an attractive market for retailers, given its young 
population and rising spending power. 
    Domestic players like Begendik have benefited as 
international chains have pulled back from the country's highly 
competitive retail market. Last year, Begendik bought 12 stores 
from German food retailer Metro AG  MEOG.DE . 
    "We had been focusing on organic growth until last year, but 
the acquisition of the Real stores showed us that we can do it 
more rapidly and easily with inorganic growth," Haci Begendik 
told Reuters in an interview. 
    He did not say how much the company would pay for the Tesco 
stores. 
    Tesco Kipa parent company Tesco Plc  TSCO.L  is cutting back 
in Turkey, where the British retailer has 173 stores but made a 
net loss of 574 million lira ($191 million) in the 2014-2015 
financial year. 
    France's Carrefour  CARR.PA  has sold some of its stake in 
local business Carrefoursa  CRFSA.IS  to Turkish partner Sabanci 
Holding  SAHOL.IS . 
    Begendik runs 46 supermarkets and 13 hypermarkets  
throughout Turkey. It aims to almost treble sales to 1.5 billion 
lira ($500 million) this year, with a target of 2 billion for 
next year, Haci Begendik said. 
    The company is in talks with foreign investors to boost 
growth and an initial public offering could follow, he said. 
    "We are in talks with several funds. There are funds from 
Iran among them. If the sanctions on Iran are lifted, there is a 
serious source of funds that will come from that country." 
    International sanctions on Iran could start to be lifted 
next year as Tehran and the West rebuild ties and potentially 
open up billions of dollars of trade deals. This follows an 
agreement between Iran and six major world powers in July where 
sanctions on Iran would be lifted in return for the country 
curbing its nuclear programme.  ID:nL5N0ZU3KR  
   ($1 = 3.0012 liras) 
 
 (Writing by Ece Toksabay; editing by David Dolan and Jane 
Merriman) 
 ((ece.toksabay@thomsonreuters.com; +90 212 3507052; Reuters 
Messaging: ece.toksabay.reuters.com@reuters.net)) 
 
Keywords: TURKEY TESCO KIPA/M&A