Blackburn’s Issa brothers on verge of deal to buy Asda

The EG group founders have been named preferred bidders for the supermarket chain by current US owners Walmart.

In March the Lancashire Telegraph reported the brothers Mohsin and Zuber were seeking to buy the firm with their EG Group’s private equity firm partner TDR Capital.

Now financial sources in the United States have revealed they are in pole position to secure the £6.5bn deal to buy Britain’s third biggest supermarket chain.

Walmart, which has owned Asda since 1999, is expected to confirm the sale in a statement to the New York Stock Exchange later this week.

Blackburn with Darwen regeneration boss Cllr Phil Riley said: “This is tremendous news.

“What a surprise that the Issa brothers ambitions just seem to grow and grow.

“They are really putting Blackburn on the map and are truly local heroes.”

Cllr John Slater, leader of Blackburn with Darwen Council Conservative group, said: “This can only be good news. I hope that the deal goes through.

"I wish them every success and I am sure they will make a huge success of it."

Miranda Barker, chief executive of the East Lancashire Chamber of Commerce, said: “This is really exciting news for Blackburn’s high-flying businessmen.

"It is absolutely good news for commerce in East Lancashire and it will be good to see Asda return to UK ownership."

It is understood the deal will initially use the Issa brothers’ private capital and is not connected to their EG Group which operates thousands of petrol forecourts worldwide.

It is the latest of a series of acquisition by them including the Stanley House Hotel and Spa in Ribble Valley.

Walmart has been looking to sell Asda since a proposed merge with rival Sainsbury’s was scuppered by competition regulators two years ago.

The Issa brothers were initially in competition with two other private equity firms, Apollo Global Management which had been working with Rob Templeman, the former boss of Debenhams and Lone Star Funds working with former Asda executive Paul Mason.

The latter pulled out of the bidding war last week and now the tender by the Issa Brothers and TDR was selected as preferred bidder for the 71-year-old UK supermarket chain by Walmart city sources confirmed.

The Blackburn-born brothers, among the richest families in the UK with an estimated worth in excess of £1billion, have recently been diversifying their interests from their main business involving almost 6,000 petrol stations and forecourt convenience stores across across 10 countries worldwide.

In February 2020 they set up Monte Hotels Ltd and in September last year bought the Stanley House hotel and spa in Mellor.

They have invested £100million in Frontier Park business estate on the Blackburn/Hyndburn border including a Hampton by Hilton hotel.

Their first venture was buying a petrol forecourt in Bury in 2001 before expanding across East Lancashire and creating Euro Garages.

The company – headquartered in a new £35m building off Blackburn’s Haslingden Road – merged with private equity firm TDR Capital’s European Forecourt Retail Group in 2016 to create the EG Group as it moved into Europe and the US.

The Issa brothers spokesman, the EG Group, TDR Capital and Asda declined to comment in advance of any Stock Market announcement.

In 2019 the business reported revenues of more than £17.9bn. TDR Capital now owns half of the group, with Zuber and Mohsin each owning 25 per cent.