Walmart Picks EG-TDR Consortium As Preferred Bidder For Asda: Sky News
Walmart Inc has picked the founders of UK petrol station operator EG Group and private equity firm TDR Capital as preferred bidder for British supermarket chain Asda at a valuation of more than £6.5 billion (€7.17 billion), Sky News reported on Monday.
Having had its attempt to sell Asda to UK rival Sainsbury's for £7.3 billion (€8.05 billion) thwarted by Britain's competition regulator last year, Walmart said in July that it had resumed talks with potential buyers of a majority stake.
A deal with Mohsin and Zuber Issa, the billionaire brothers who founded EG Group nearly two decades ago, and TDR would bring Asda back under British ownership for the first time since 1999, when Walmart paid £6.7 billion (€7.39 billion) for the business.
A formal agreement, however, could be several days or weeks away, Sky News said. TDR, EG Group and Asda declined to comment.
Walmart did not respond immediately to a request for comment and Mohsin and Zuber Issa could not be reached for immediate comment.
Decline In Valuation
The reported valuation's drop from the proposed Sainsbury's deal is likely to be because of the integration benefits that a merged Sainsbury's and Asda would have delivered.
While Asda's sales have increased during the COVID-19 pandemic, the chain has lagged behind the growth of main rivals Sainsbury's, Morrisons and market leader Tesco , partly because it does not yet have convenience stores in its portfolio.
Local convenience stores have thrived during the coronavirus crisis as Britons shop closer to home.
'Asda on the Move'
Asda this month announced a deal with EG Group to develop 'Asda on the Move' branded convenience stores on EG petrol forecourts.
Sky News said the Issa brothers and TDR want to retain Asda CEO Roger Burnley, who last month detailed how the group plans to expand its online capacity to meet pandemic-driven demand.