TDR Capital reveals eye-watering paper gains only year after UK chain’s purchase from Walmart
Asda’s private equity co-owner has valued its stake in the grocer at almost 20 times the amount it paid last year, an exceptional paper return enabled by the extensive financial engineering used in the takeover.
Marylebone-based fund TDR Capital and billionaire Blackburn-based brothers Mohsin and Zuber Issa used an unusually small amount of their own money in the £6.8bn acquisition.
Now TDR has told investors that it has already marked its stake at 19.8 times its original investment. A marketing document for TDR’s latest fund, seen by the Financial Times, pegs the valuation of the stake at about €1.7bn (£1.4bn), implying TDR may have put in only tens of millions of euros.
Valuing Asda at 9.1 times core earnings — the same multiple that rival buyout group CD&R said it paid for Wm Morrison last year — would make it worth £11.8bn, including debt, more than 1.7 times its £6.8bn value when the Issas and TDR acquired it.
Read more: FT
