Issa brothers pull out of £750m Asda petrol deal
The Blackburn businessmen’s EG Group had been lined up to purchase the supermarket chain’s petrol forecourts but terminated the deal after an updated financial evaluation of the proposal.
The petrol forecourts deal was a key part of the £6.8bn takeover of Asda by Mohsin and Zuber Issa and private equity firm TDR Capital. However, while it was a part of the transaction’s complicated list of debt deals and asset sales, EG Group’s purchase of the petrol stations was a separate deal – one that had been months in the making.
News first broke of the agreement for the petrol station giant to purchase Asda’s forecourt business in February. It was held up because of concerns over UK Competition Law.
However, in June, any potential restrictions on the purchase were lifted.
A statement from Asda describes what happened next: “This allowed Asda and EG Group’s teams to start sharing commercial information relating to EG’s acquisition of the Asda Forecourt Business which had not been previously possible and has resulted in several changes to the financial evaluation of the proposed Transaction. As a result, EG and Asda have decided they will no longer proceed with the Transaction, and it was terminated as of 18 October 2021.”
EG is in the process of redeeming the £675m bond it issued to finance the deal. Asda, on the other hand, is responsible for settling the forecourts bridge facility – which it will do with £250m of its own cash. The company will go into debt to pay the remaining £500m.
Asda said that it plans to continue working alongside EG in the future, calling its relationship to the company a “strategic alliance”. Projects include establishing 28 Asda On the Move stores at EG forecourts this year, with another 200 planned to debut by the end of 2022.
