EG Group raises multimillions through preference shares sale
Petrol forecourts business EG Group has raised hundreds of millions of pounds through the sale of new preference shares.
The proceeds could be used towards the group’s £6.8bn acquisition of Leeds-headquartered supermarket chain Asda from US group Walmart, in the largest British leveraged buyout in more than a decade.
EG Group founders, brothers Mohsin Issa and Zuber Issa, and the private equity firm TDR Capital, raised the funds through the Abu Dhabi Investment Authority (Adia) and two Canadian pension funds, the Alberta Investment Management Corporation and PSP Investments.
Holders of preference shares receive interest payments that accrue and compound over time, but don’t hold a stake or any voting rights.
Blackburn-based EG said issuing the preference shares would “not result in any change to the ownership” of the group and “will have no effect on our business”.
It has been estimated that the deal with the three investors could value EG at more than £15.1bn, including debt, and indicate an equity value of more than £9bn, which could herald a huge stock market flotation within the next couple of years.
A statement by EG Group said: “We are delighted that our shareholders have been able to attract high-quality investors.
“That demonstrates confidence in them and their ability to generate stakeholder value.
“The investment will not result in any change to the ownership of EG Group, proceeds will not be for use by EG Group, and will have no effect on our business.
“Given that the investment is a private matter for our shareholders, we are not able to comment further.”