Zuber Issa closes in on plan to buy back EG Group
Zuber Issa has taken a step closer to acquiring the UK business of EG Group as part of the ongoing moves to reduce the debt burden on the retail and property empire he founded with his brother Mohsin.
The deal, which excludes the Cooplands bakery, some Starbucks stores, and EG’s electric vehicle charging business Evpoint, is scheduled to be finalised by the end of June.
A statement from Blackburn-based EG Group said: “We are currently engaged in active discussions with Zuber Issa and his advisers regarding the sale of the retained UK business…with a view to announcing a binding agreement in the second quarter of 2024.”
The younger of the two brothers Zuber, and the founder of EuroGarages, as it was first known, is also seeking a buyer for his 22.5% stake in Asda, which he secured after a £6.8bn private equity purchase backed by TDR Capital three years ago.
Recently filed accounts reveal EG Group made a profit following the sale of 350 petrol stations and more than 1,000 food-to-go sites to Asda last year, a deal designed to slash soaring borrowing costs.
EG made £1.1bn of pre-tax profit for the year, up from a loss of £203m in 2022.
However, without the Asda sale the business was still loss making and recorded a pre-tax loss of £98.3m.
EG Group chairman Lord Stuart Rose said: “Despite challenging macroeconomic conditions and ongoing geopolitical uncertainty, EG continues to play an important role in the global delivery of convenience retail, foodservice and fuel to our millions of customers.”
The recent parliamentary business select committee hearings, which Mohsin gave evidence at, confirmed the complexity of the ownership structures of Asda and EG, and any process to extricate any party would need to deal with lock-in agreements with his brother and TDR.
Media speculation has also focused on the breakdown of Mohsin’s marriage and a new relationship with a former tax partner from EY which has apparently “sent shockwaves” through the wider Issa family.
Mohsin Issa has insisted there is no rift with his brother Zuber, claiming in a rare interview with the BBC that they “get on exceptionally well”.
He told the BBC during a store opening in Stevenage in February: “We talk to each other probably two or three times a day. We’ve been very, very privileged. We have been on a journey and we have got a long way still to go.”
The Issa brothers acquired Asda with £100m of cash, the same amount from TDR Capital, with the rest funded by the largest sterling corporate bond sale ever completed.
