Inside TDR, the secretive — and powerful — investment consortium

A consortium of investors has just completed a £6.8 billion buy-out of one of the nation’s largest supermarket chains. But where did they come from?

This week UK-based entrepreneur brothers Mohsin and Zuber Issa found themselves at the helm of the UKs biggest leveraged takeover in more than a decade when they and secretive buyout firm TDR Capital completed the acquisition of Asda for £6.8 billion. 

Walmart, Asdas US parent company, will retain an equity investment in the business and seat on the board, with the Issa brothers and TDR Capital consortium taking a majority stake in the company.

According to information published by Business Report, Walmarts remaining minority stake in Asda is valued at £500 million, while TDR Capital reportedly paid just £780 million in cash for the supermarket chain. According to the report, £.7 billion was raised through selling debt while £1.7 billion was raised through the sale of Asda assets, including the sale of the supermarkets petrol stations to the Issa brothers EG Group. 

While it is common for private equity-backed takeovers to be funded in large parts by debt, the Asda deal is a somewhat extreme example, with just 12 per cent of the purchase price coming via fresh equity from the new owners,notes the Industry Insights report at Business Report. 

Concern was raised by a UK watchdog that the fuel sale valued at £750 million could lead to a rise in fuel prices at 36 locations across the UK. However, this was not enough to prevent the deal from going ahead. 

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