Carrefour cuts bidders for Asian stores, sources say

French retailer Carrefour SA has cut British rival Tesco PLC and Japan's Aeon Co. out of the bidding for its stores in Southeast Asia, people familiar with the matter said.

Those bidders that have gone through to the next round include Casino Guichard-Perrachon SA of France, together with Thailand's Big C Supercenter PCL, which it part owns; Thai retail group Central Group; Thai consumer products manufacturer Berli Jucker PCL; and Thailand's largest energy conglomerate by revenue, PTT PCL, which runs convenience stores at its gas stations.

Carrefour, the world's second-largest retailer after U.S.-based Wal-Mart Stores Inc., is selling assets in Singapore, Thailand and Malaysia and was hoping to raise about $1 billion, people familiar with the matter said.

Carrefour collected first-round bids last week.

Tesco was seen by other bidders as a leading contender for the assets. One person familiar with the matter said Carrefour could potentially invite Tesco back at a later stage in the auction.

Carrefour's decision will come as a disappointment for Aeon, which is under pressure to expand out of its competitive domestic market, where consumer spending is weak.

One person familiar with the matter said Aeon was particularly interested in the Malaysian stores. Aeon took over Carrefour's eight Japanese stores in 2005.

Other bidders Carrefour dropped from the race include Dairy Farm International Holdings Ltd., which teamed up with its parent, Jardine Matheson Holdings Ltd.

Carrefour cut several firms from the bidding because it thought they had put in a low-ball price, people familiar with the matter said. Some bidders were concerned about the performance of Carrefour's stores in Thailand, they added.

Second round bids are due in November.

Carrefour may sell all the assets to one bidder or dispose of the Malaysian and Singapore stores separately from the Thai stores. Goldman Sachs Group Inc. and UBS AG are advising Carrefour.

Carrefour had a total of 358 stores in Asia as of December, according to its annual report. It had 44 stores in Thailand, two in Singapore and 23 in Malaysia as of June 30.

The retailer's chief executive, Lars Olofsson, said in May that he was open to offers for the company's operations in markets where it wasn't ranked No. 1 or No. 2.

Carrefour fell behind Tesco and Big C in Thailand and struggled to expand significantly outside the Bangkok area. Malaysia is also a very competitive market and one person familiar with the company said it would have had to make a transformational acquisition or partnership to be competitive.

Under Mr. Olofsson, Carrefour has focused on its key European markets: France, Spain, Italy and Belgium. France alone accounts for nearly half of the company's annual revenue. Abroad, fast-growing China, India and Indonesia are priorities for Carrefour.

Spokespeople for Carrefour, Tesco, Aeon and Big C declined to comment. Berli Jucker and PTT couldn't be reached immediately.