Asda Considers Sales of Gas Stations Amid Mega Buyout
Unleaded fuel drips from a petrol pump at an ASDA Group Ltd. supermarket gas station in this arranged photograph in Croydon, U.K. (Photographer: Luke MacGregor/Bloomberg)

Asda Considers Sales of Gas Stations Amid Mega Buyout

U.K. retailer Asda Group Ltd is considering selling some or all of its gas stations to EG Group Ltd, whose owners are in the process of buying the grocery chain, according to people familiar with the matter.

Private equity firm TDR Capital and brothers Mohsin and Zuber Issa are set to buy Asda, in a 6.8 billion pound ($9.15 billion) deal, with current owner Walmart Inc keeping a minority share. If the sale of the gas stations goes ahead, the assets would remain in the hands of TDR and the Issas since they also own EG Group.

EG Group has repeatedly tapped the debt markets to fund its rapid expansion through a three-year acquisition spree, and has amassed nearly 10 billion dollars of debt, data compiled by Bloomberg show.

The buyout will be reviewed by the Competition and Markets Authority (CMA) before closing.

Representatives for EG Group declined to comment, representatives from TDR and Asda did not immediately respond to a request for comment on the potential sale. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction.

The size and structure of the debt financing -- one of Britain’s largest leveraged buyouts -- may change depending on the potential sale of Asda’s forecourts, the people said who asked not to be identified.

TDR and the Issas currently plan to raise debt worth 3.65 billion pounds ($4.9 billion) to buy the grocery chain.

Read more: Banks Begin Sale of Debt Financing for Asda Buyout from Walmart

A Barclays Bank Plc-led group arranging the financing for the buyout of U.K. retailer Asda are expected to launch term loans as well as secured and unsecured bonds early next year.

Read more: Asda Will Pay GBP340m Business Rates in Full to UK Government

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