Billionaire Issa Brothers have raised a record £2.75 billion’s worth of junk bond sales to secure ownership of Asda.
This comes after reports that EG Group had borrowed £3.5 billion to complete the deal. By raising money through selling the bonds, the brothers hope to finance their £6.8 billion purchase of Asda while only injecting a relatively small amount of their own funds, however they have also said that they plan to invest a total of £1 billion in their new business over the coming years.
EG Group has agreed to acquire certain assets of Asda, comprising its petrol filling stations, car washes and ancillary land (the “Forecourt Business”) for a headline enterprise value of £750m.
EG’s acquisition of the Forecourt Business is subject to the same CMA regulatory clearance being received by the Group’s shareholders for their acquisition of Asda. Subject to these approvals, the transaction is currently expected to close in the second quarter of 2021.
Financing options are currently being considered. A detailed integration plan will ensure a seamless transition into EG Group’s UK operations, which have successfully integrated four significant acquisitions since 2015. The forecourts, which will remain an integral part of the broader retail locations where they are situated, will continue to be Asda branded and will remain a price leader in the fuel market.
Zuber Issa CBE and Mohsin Issa CBE, co-founders and co-CEOs of EG Group, in a joint statement, said: “We are excited to have the opportunity to further strengthen our network in the UK through the proposed acquisition of Asda’s forecourt business, which will enhance our position as a major independent forecourt operator and provide a platform for future growth of the combined network.”
EG Group is expected to announce its Q4 and full year 2020 trading results on Thursday February 25, 2021.
