Asda is set to take on new owners after Zuber Issa sold his stake in the supermarket group to private equity backer TDR Capital.
TDR Capital, which helped finance Issa and his brother Moshin’s £6.8bn debt-fueled takeover of Asda in 2021, will become the group’s majority owner after buying the 22.5 per cent stake. by Zuber.
The private equity firm will own a 67.5 percent stake in the group when the deal is completed, while Moshin retains its 22.5 percent stake and former owner Walmart owns 10 percent.
The private equity firm will own a 67.5% stake in the group when the transaction closes.
Rumors that Issa would sell its stake emerged in April after Asda reported it had returned to profit, following a difficult period in which the supermarket struggled with the rising cost of servicing its debts and weak earnings. consumers.
In a statement, Zuber said the investor group “has driven a period of significant investment and business growth activity.”
He added: “I will now turn my attention to leading and managing the remaining EG service stations in the UK that I have personally acquired, and will dedicate more time to my charitable efforts.
‘I am pleased to see TDR increase its investment in Asda. “With Mohsin and TDR’s continued focus and shareholding, I am confident Asda will achieve its growth ambitions.”
Asda bought the UK and Ireland operations of petrol station giant EG Group, which is also owned by the Issa brothers, in May last year. The acquisition has faced scrutiny after a Competition and Markets Authority report found Asda’s target fuel margin (the difference between what it paid for fuel and the pump price) was three times higher for 2023 compared to 2019.
The group, which is still searching for a new permanent chief executive, last month reported a slowdown in quarterly sales growth and underperforming its larger rivals.
Meanwhile, industry data suggests Asda is losing market share.
But last month Asda announced it was refinancing most of its debt thanks to “strong demand” from investors.
Gary Lindsay and Tom Mitchell, managing partners at TDR Capital, said: ‘We first invested in Asda over three years ago, seeing a huge opportunity to consolidate its position as one of the UK’s leading retail brands.
“As majority owners, we will continue to work closely with Asda’s management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to take Asda forward.”
Mohsin Issa added: ‘Today’s announcement further underlines my and TDR’s confidence in both Asda and the UK consumer market.
‘As a group of shareholders, we are excited about the growth journey we are on. Asda is an iconic British brand and we are committed to setting it up for long-term success and delivering great value to customers across the UK.
“I also want to add my personal support and best wishes for Zuber’s plans as we continue our successful family partnership, working as partners on our personal co-investments, family office philanthropy and Issa Foundation projects.”