The private equity-backed billionaires buying Asda will pay less than £800m of their own money to take a controlling stake in the supermarket, a fraction of its £6.8bn valuation, after selling its assets and raising its debts to fund the majority of the purchase price. Blackburn-based brothers Mohsin and Zuber Issa and the private equity firm TDR Capital are buying the supermarket chain, in the UK’s biggest leveraged buyout in more than a decade.
They have arranged an intricate series of asset disposals and debt deals to fund the bulk of the buyout, allowing the new owners to put in fresh equity equivalent to just 12 per cent of the purchase price, according to documents sent to debt investors this week. An estimated £165m of fees will be paid to the lawyers, bankers and other advisers on the deal.
The billionaire brothers and their private equity partners have spent the past five years transforming EG Group into one of the world’s largest petrol pump businesses, through a breakneck series of debt-funded acquisitions.
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