Billionaire Issa brothers who own Asda ‘in bid to take over 130 Co-op forecourts’: Supermarket giant emerges as frontrunner to buy rival grocer’s petrol stations for £450m
- The Issa brothers ‘are frontrunners’ in Co-op Group’s petrol stations takeover bid
- The billionaire brothers own Asda, which runs 320 petrol stations across the UK
- If the acquisition goes ahead, it would free up cash for the Co-op Group, which announced it would cut around 400 jobs in the face of tough trading conditions
The billionaire Issa brothers who own Asda have reportedly emerged as the frontrunners in the bid to take over the Co-op Group’s petrol stations for £450 million.
The supermarket giant is in talks to buy the business as it prepares to move further into the UK’s convenience store market, Sky News reported.
The deal could be confirmed as soon as this week although it is reported that other businesses are still interested in putting in bids for the assets.
Asda — which runs 320 petrol stations across the UK — was taken over by the brothers Mohsin and Zuber Issa and TDR Capital last year.
It agreed to sell 27 of its forecourts in order to secure the acquisition following competition concerns by the regulator.
Billionaire Issa brothers, who own Asda, have reportedly emerged as the frontrunners in the bid to take over the Co-op Group’s petrol stations
The deal would free up cash for the convenience chain which last month announced it would cut around 400 jobs in the face of tough trading conditions worsened by rising inflation
But the billionaire brothers behind Issa Brothers abandoned a £750 million plan to fold Asda’s petrol forecourts into its filling station empire in October.
Issa Brothers and TDR Capital also own EG Group, one of Europe’s largest independent fuel retailers, but people close to the auction process confirmed that Asda, not EG Group, is leading the talks with Co-op, Sky reported.
If the acquisition goes ahead, Co-op’s approximately 130 petrol stations would move into Asda’s hands where it would be more closely tied up with the UK’s food retailing market.
Asda — which runs 320 petrol stations across the UK — was taken over by the Issa Brothers and TDR Capital last year
The deal would free up cash for the convenience chain which last month announced it would cut around 400 jobs in the face of tough trading conditions worsened by rising inflation.
Co-op Group — which owns supermarket chains and funeral care operations — has offloaded a number of its divisions over the past decade, including its chain of pharmacies and travel shops.
Reports of the potential Asda deal also comes just a week after Shirine Khoury-Haq was appointed the group’s first female chief executive officer in its 159-year history.
Asda declined to comment on the speculation and the Co-op Group was not immediately available for comment.
In May, the Issa brothers lodged last-minute bids to take control of the collapsed corner shop chain McColl’s, but lost to Morrisons
The billionaire Issa brothers’ petrol garage starting point in Bury
Brothers Mohsin and Zuber Issa founded EG Group, one of Europe’s largest independent fuel retailers.
The company began as one petrol station that the brothers ran in Bury, Greater Manchester.
It then became Euro Garages, with locations across the UK, before private equity giant TDR Capital came onboard.
The business then became EG group, and expanded into Europe.
The EG Group has acquired brands including Cooplands, Cumberland Farms, Go Fresh, Leon and Loaf ‘N Jug.
The Issa brothers separately bought supermarket giant Asda with TDR Capital.
Earlier this year, the brothers lost out on bids to acquire corner shop chain McColl’s, and the Walgreens Boots Alliance.
In June, the US owner of pharmacy chain Boots has abandoned its plans to sell the UK high street chemist despite interest from the billionaire Issa brothers.
Walgreens Boots Alliance decided to keep both the pharmacy chain – which has 2,260 stores in the UK and employs around 55,000 – and the No7 beauty brand after ‘market instability’ put a stop to its plans to sell.
The 172-year-old feature of British high streets merged with Walgreens through deals in 2012 and 2014 and was valued at about £9 billion at the time.
It was set for a sale of £5billion after a bid by Indian billionaire Mukesh Ambani through a consortium of Apollo Global Management and Reliance Industries.
However there were other takeover approaches from the Issa brothers’ Mohsin, and Zuber — who promised to invest £1billion to improve Asda since buying that business.
In May, the Issa brothers lodged last-minute bids to take control of the collapsed corner shop chain McColl’s.
But Morrisons won the battle to take over, securing the future of 16,000 jobs and 1,100 shops.
The supermarket giant fended off competition from the billionaire brothers, after a takeover tussle.
McColl’s lenders initially rejected an offer from Morrisons that would have seen it take on the firm’s debts and repay them over time.
But the supermarket chain returned with an improved deal that would see the lenders repaid in full immediately, satisfying one of McColl’s key demands.
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