Leahy looks for £500m for his China venture

FORMER Tesco boss Sir Terry Leahy is looking to raise up to £500m to invest in Chinese shopping centres with the support of a former colleague.

Leahy and Paul Mercer are working with stockbroker Numis to handle a fundraising in the hope of capitalising on China’s economic growth, which has remained strong despite the global slump.

Both men have considerable experience of working in the East. Leahy led Tesco’s expansion in China and now the firm expects to have 150 leasehold hypermarkets there by 2014-15, as well as around 50 freehold Lifespace malls. Mercer was previously chief exec of Tesco Property China.

It was unclear last night whether Leahy and Mercer would build shopping centres or seek to invest in existing businesses. The new venture could be privately-owned, rather than listed, but it is not certain to go ahead, a source said yesterday. Numis declined to comment.

It came as Leahy’s successor as Tesco chief executive warned of the difficulties facing British retailers, as he defended a decision to cut prices. Phil Clarke told the IGD grocery conference: “We’re facing one of the toughest trading conditions this country has seen for decades.”