Discount buyout

4 February 2021 By Neil Unmack, Aimee Donnellan Follow @unmack1

The Issa brothers and TDR will put in only $1 bln to buy Asda. The deal makes canny use of generous debt and property markets. Borrowing, while high, looks manageable so long as the gas pump tycoons can manage the triple threat of discounters, Amazon and Brexit.

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The Issa brothers and TDR Capital will offload Asda’s petrol stations to their own EG Group for 750 million pounds when their purchase of the British supermarket group from Walmart is completed, they said on Feb. 3.

Last October, Zuber and Mohsin Issa and private equity firm TDR Capital, agreed to buy a majority stake in Asda from Walmart in a deal which gave the group an enterprise value of 6.8 billion pounds.

As part of the deal, the Issa brothers and TDR said they also plan to sell some of Asda’s distribution assets to institutional real estate investors. Asda would continue to operate the assets.

The financing of the Asda deal will see the brothers and TDR raise 840 million pounds of loan facilities, 2.25 billion pounds of senior secured notes and 500 million pounds of senior notes.

They have committed to invest 1 billion pounds in Asda over the next three years.

Context News

Last October, Zuber and Mohsin Issa and private equity firm TDR Capital, agreed to buy a majority stake in Asda from Walmart in a deal which gave the group an enterprise value of 6.8 billion pounds.

As part of the deal, the Issa brothers and TDR said they also plan to sell some of Asda’s distribution assets to institutional real estate investors. Asda would continue to operate the assets.

The financing of the Asda deal will see the brothers and TDR raise 840 million pounds of loan facilities, 2.25 billion pounds of senior secured notes and 500 million pounds of senior notes.

They have committed to invest 1 billion pounds in Asda over the next three years.

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