One half of the billionaire Issa brothers has sold his stake in Asda to the private equity giant the pair partnered with to secure its £6.5bn takeover in 2021.
Funds managed by TDR Capital have agreed to acquire Zuber Issa’s shares in the Leeds-headquartered chain.
Mohsin Issa will remain a co-owner of Asda alongside TDR Capital. The move means that the private equity giant now has a stake of 67.5 per cent in the supermarket while Mohsin Issa will hold 22.5 per cent.
A further 10 per cent is held by former owner Walmart. The deal is expected to complete in the third quarter of 2024.
The news comes after it was reported that Zuber Issa was close to selling his stake in Asda in April.
It has also been announced that Blackburn-headquartered EG Group has agreed to sell its remaining UK forecourts business to Zuber Issa for £228m.
‘I am confident that Asda will achieve its growth ambitions’
Zuber Issa, who is the co-CEO of EG Group, said: “Since Mohsin and I, alongside TDR, took ownership of Asda, we have driven a period of significant investment and entrepreneurial growth activity.
“Notably, Asda acquired a market-leading UK convenience retail and foodservice store business from EG Group.
“With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.
“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”
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As part of the EG Group deal, Zuber Issa is to step down as co-chief executive with his brother continuing to lead the business.
He will return his existing shareholding and remain on the board as a non-executive director. EG Group is also backed by TDR Capital.
That deal is expected to complete in the second half of 2024.
On that deal, Moshin and Zuber Issa, in a joint statement, said: “We have had an amazing journey together building EG Group over the last 20 years and we look forward to continuing to work closely together as fellow Board members and shareholders in EG Group.
“The company is well positioned for future growth and success, with a strong international portfolio and a growing EV business.
“We are both – and the wider board – laser-focused on our key growth opportunities.
“Encouragingly, following the significant progress to strengthen our balance sheet, we have a capital structure which allows us to take advantage of the opportunities ahead of us continuing to deliver our best-in-class services to our customers around the world.
“Given our shared background in building great businesses, the board and everyone at EG understand Zuber’s desire to return to his entrepreneurial UK roots by acquiring the remaining UK forecourt business including new- to-industry developments and certain standalone food service concessions – as well as dedicating more time to his family and our charitable activities.”
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In a statement, TDR Capital said it will “remain focused on investing in Asda’s stores and online, as well as its colleagues through the highest pay in the traditional supermarket sector, to drive sustainable, long-term growth”.
It added that it “will continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to move Asda forward”.
Asda chairman Lord Stuart Rose said: “On behalf of the board, I welcome TDR’s increased investment in Asda – which is a clear sign of its commitment to the business.
“Asda’s heritage is in delivering great value for customers on a daily basis across its entire proposition from groceries to fashion and food-to-go – and the board has never been more committed to deliver on this promise.
“The board and shareholders continue to put in place the building blocks to position Asda for long-term success and that is good news for colleagues, customers, suppliers and other business partners.”