New period for Asda as TDR Capital turns into majority proprietor

Asda is set for new ownership after Zuber Issa sold his stake in the supermarket group to private equity backer TDR Capital.

TDR Capital, which helped finance Issa and his brother Moshin’s debt-fuelled £6.8billion takeover of Asda in 2021, will become the group’s majority owner after buying Zuber’s 22.5 per cent stake.

The private equity firm will own a 67.5 per cent stake in the group when the deal is completed, while Moshin retains his 22.5 per cent stake and former owner Walmart owns 10 per cent.

The private equity firm will own a 67.5% stake in the group when the deal is completed

Rumours Issa would sell his stake emerged in April after Asda reported it had returned to profit, following a difficult period that saw the supermarket struggle against the soaring cost of servicing its debts and consumer weakness.

In statement, Zuber said the group of investors ‘have driven a period of significant investment and entrepreneurial growth activity’.

He added: ‘I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.

‘I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.’

Asda bought the UK and Irish operations of petrol station giant EG Group – which is also owned by the Issa brothers – in May last year. The takeover has faced scruinty after a Competition and Markets Authority report found that Asda’s target fuel margin – the difference between what it paid for fuel and the pump price – was three times higher for 2023 compared with 2019.

The group, which is still on the hunt for a new permanent chief executive, last month reported a slowdown in quarterly sales growth and an underperformance versus its bigger rivals.

Meanwhile industry data suggests Asda is losing market share.

But last month Asda announced the refinancing of most of its debt thanks to ‘strong demand’ from investors.

Gary Lindsay and Tom Mitchell, managing partners of TDR Capital, said: ‘We first invested into Asda over three years ago, seeing a huge opportunity to cement its position as one of the UK’s leading retail brands.

‘As majority owners, we will continue to work closely with the Asda management team and colleagues across the business to support the ambitious strategy, which we believe is the right one to continue to move Asda forward.’

Mohsin Issa added: ‘Today’s announcement further underlines my own and TDR’s confidence both in Asda and the UK consumer market.

‘As a shareholder group, we are excited about the growth journey we are on. Asda is an iconic British brand and we are committed to setting it up for long-term success and delivering great value for customers across the UK.

‘I also want to add my personal support and best wishes for Zuber’s plans as we continue our successful family partnership, working as partners on our personal co-investments, family office philanthropy and Issa Foundation projects.’