British retailer Tesco PLC has picked private equity firm MBK Partners as preferred bidder to buy its South Korean unit, two people with direct knowledge of the process said, in what is set to be the largest ever private equity deal in Asia.

While the value of MBK's bid could not be immediately determined, a source told Reuters last week Tesco had received three separate binding bids for the unit, called Homeplus, at around the 7 trillion won ($5.9 billion) range.

The sale is the first large divestment by Tesco, whose credit rating was cut to "junk" status by Moody's and S&P in January after an accounting scandal and market share losses in Britain to discount chains Aldi and Lidl, which have pressured the retailer to sell its biggest overseas unit.

A disposal of Homeplus could help Tesco reclaim its investment-grade status sooner, some analysts have said.

Seoul-based MBK, one of the largest Asia-based private equity firms, is backed in its bid for Tesco's South Korean business by Singapore state investor Temasek Holdings and is seeking funds from South Korea's National Pension Service (NPS).

The three bidders for Homeplus were Affinity Equity Partners together with KKR & Co, Carlyle Group LP, and MBK, people familiar with the matter previously told Reuters.

The sources declined to be identified as the sale process is private.

Spokesmen for Tesco's South Korean unit and MBK declined to comment on Wednesday. Carlyle also declined to comment. An NPS official could not be immediately reached for comment.