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The owners of EG Group, who bought out Asda in a £6.8bn takeover, have revealed that they will no longer be acquiring the grocer’s forecourt business in a £750m deal.
The Issa brothers Zuber and Mohsin, had previously agreed to purchase the supermarket chains petrol filling stations, car wash sites and some land in February this year.
Despite the acquisition needing to receive CMA regulatory approval in June this year, all restrictions were removed as the group received the “green light” to purchase.
This allowed Asda and EG Group’s teams to start sharing commercial information relating to its acquisition of the forecourt business which had not been previously possible.
However it resulted in “several changes” to the financial evaluation of the proposed transaction with the group ultimately deciding they will “no longer proceed” with the transaction.
Subject to market conditions, the group stated it had management plans to settle the Forecourts Bridge Facility through a combination of £250m cash on hand and a new issuance of “long term senior secured debt” of £500m.
Furthermore, the group said it will now be commencing the process to redeem the £675m in “aggregate principal” amount of 6.25% Senior Secured Notes due 2026 issued on March 12, 2021 and unwind the related escrow arrangement.
In a statement, the group added: “Key commercial initiatives between EG and Asda are already well underway including the development of plans to introduce Foodservice at Asda locations and the expansion of Asda’s convenience offering, where both companies have confirmed their intention to roll-out the Asda On the Move proposition across EG’s UK forecourts.
“These plans remain unchanged, and the company continues to anticipate synergies as a result of its growing relationship with Asda.”
