The French retailer's operations in Thailand, Singapore and Malaysia have a combined estimated worth of US$1 billion (RM3.2 billion).
Industry estimates for the Malaysian operations alone put the business at RM1.5 billion. The price could be higher, and still attract foreign buyers.
The rules governing the expansion of foreign hypermarkets in the country is rigid. The government has frozen the issue of licence at least twice.
While there has been no new foreign hypermarket entrant into the country since Tesco's entry in 2001, there has been an exit. Makro Cash and Carry Distribution called it quits in early 2007 and Tesco bought the business.
As it stands today, the Ministry of Domestic Trade and Consumer Affairs is only doing a licence swap.
This means that a hypermarket operator, who for some reason cannot open an earlier planned store, can now hand in its old unused licence to the ministry in return for a licence to open at a different location.
As such, the best and fastest way for a foreign hypermarket to grow is through acquisition of existing stores.
For instance, Hong Kong's Dairy Farm International Ltd - operator of the Giant chain here - has made at least seven acquisitions to grow its market and stay ahead of the pack.
Thus, if Carrefour today is operating 23 stores in the country, including the four anticipated openings this year, this means that it has a total of 27 licences. There could, in fact, be some unused licences, too.
For an existing player, assuming that an average of five new licences are issued each year, it could take five years at least to obtain the 27 licences and a few more years to build new stores.
On the same premise, we assume that James McCaan, a member of the executive board of Carrefour SA, is aware of how precious hypermarket licences in Malaysia are.
McCaan was the chief executive officer of Tesco Stores (M) Sdn Bhd between 2004 and 2006. During his tenure in Malaysia, he would have familiarised himself with the local hypermarket environment.
As such, he may have an idea how far the existing players may be willing to go to get ahead of the game.
Moreover, Carrefour is a profitable venture in Malaysia, at least based on its 2008 figures which show a net profit of RM33.15 million.
This coupled with strategic location of stores and licence surely makes the business an attractive buy.
Sources in Malaysia said that the two leading hypermarket chains, Tesco and Dairy Farm, had already put in their bids.
But the pertinent question is whether Carrefour in Malaysia is for sale.
Last Thursday, Carrefour Malaysia issued a statement saying that it was business as usual in Malaysia and Singapore and there was no store closure.
When Business Times wrote to its managing director for Malaysia, Guillaume de Colognes, on whether the statement was tantamount to denying that its operations here were for sale and that no bids had been called for or offered, the response was: "We neither confirm nor deny that statement."
By Vasantha Ganesan
Business Times
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