Asda’s new owners plan to sell George, the supermarket giant’s £ 3bn clothing business
The new owners of Asda have considered selling George, the supermarket giant’s £ 3 billion clothing business, industry sources told The Mail on Sunday.
The sale is believed to be one of a number of strategies that have been examined – including the separation of its alcohol business and its management by a third party.
Blackburn-based Zuber and Mohsin Issa, alongside their private equity partners TDR, agreed to buy a controlling stake in Asda from U.S. retail giant Walmart earlier this month.
Write on the wall ?: The new owners of Asda have considered selling George, the supermarket giant’s £ 3 billion clothing business.
The £ 6.7bn deal is yet to be concluded and it is not yet clear how the buyers will finance the acquisition.
The brothers – who were awarded a CBE in the Queen’s birthday honors list this weekend – have already set up a £ 18bn gasoline forecourt business EG Group through a series of deals daring projects financed by cheap debt. The MoS revealed last week that interest on EG’s £ 7.7 billion debt had completely wiped out profits and drastically reduced its tax payments.
Advisors acting for the Issas and TDR considered a sale of the EG Group – which operates forecourts, food services and convenience stores across Europe and the United States – through a US exchange one year ago. But, after preliminary explorations, they decided not to present a formal plan.
Sources in the city said an initial public offering had been pinned on a valuation of at least £ 9bn for EG Group – in part to cover huge debts. But investors were concerned about the company’s heavy reliance on gasoline and the long-term impact of switching to battery cars.
Representatives of Issas and TDR declined to comment on strategic plans or explain why EG Group did not carry out floating plans last year.
Sources close to the brothers insisted that splitting up clothing or other parts of the business was “not being considered” and pointed out that the deal “had only just been announced and was still far away. to be completed ”. They insisted that there was “no formal process” to launch the business last year.
But several senior supermarket sources said a sale of George could raise funds to reduce any debt used to buy the grocery chain.
Share or comment on this article: