This week UK-based entrepreneur brothers Mohsin and Zuber Issa found themselves at the helm of the UK’s 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, Asda’s 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.

, Walmart’s 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 supermarket’s petrol stations to the Issa brother’s 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.

 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.

Mohsin and Zuber Issa, who grew a single petrol station into an investment empire


Structuring the deal this was is unusual, not to mention intricate. It also leaves Asda with over £3.4 billion in net debt, when previously it had zero external debts. The Issa brothers have reassured concerned parties that they are “putting in place a robust capital structure”, adding:

“We look forward to working with our Asda colleagues to build an even stronger, more differentiated retailer – including through the investment of more than £1bn in the next three years to further strengthen the business and its supply chain.”

Speaking to Business Report, Shore Capital retail analyst Clive Black expressed concerns. “The risk profile of Asda has undoubtedly gone up… They [the Issas] have bought Asda when supermarkets have got elevated sales and brighter general prospects as working from home and online groceries are probably here to stay. There is lots of money around and it is very cheap for risk-taking entrepreneurs and private equity but only time will tell whether they will look back and think that was a good thing to do.”

Time will indeed tell, but perhaps TDR’s track record will offer some insight. Let’s take a look.

Paul Tudor Jones, the billionaire US hedge-fund manager, helped TDR to establish itself in the early days


TDR Capital LLP is a private equity firm founded in 2002 with interests in construction, insurance, logistics, and food retail industries in the UK.

The company is the brainchild of London-based businessmen Manjit Dale and Stephen Robertson and used money from US hedge fund billionaire – and former Weinstein Company board member – Paul Tudor Jones to establish itself.

 profile of the firm, Dale is a “dominant figure at the firm, who smokes heated tobacco sticks during meetings” and first worked with Robertson at Bankers Trust in 1995.

He and Robertson (then aged 37 and 42 respectively) set out on their own in 2002, securing around about €155m of their first €550m first fund from Jones’ Tudor Investment Corporation. Its fourth, and latest, fund manages €3.5bn.

 piece, Jones is no longer involved but is entitled to €1m per year from the company “forever” as a result of a handshake deal.

“But what has stayed remarkably consistent is a small team investing large sums of their own money and concentrating on a handful of deals,” write Kaye Wiggins and Robert Smith in the piece with Dale telling the 

 that he dislikes bureaucracy “intensely” and that “I want us to make good business decisions with as little fuss as possible.”

It seems to have made good business decisions in abundance; TDR was previously the largest shareholder of the group behind Pizza Express and in 2013 acquired the David Lloyd gym chain for £750 million. In 2015 it acquired a stake in Euro Garages alongside the Issa brothers, a deal which proved to be useful in the Asda takeover, as outlined. And, in 2017 the company bought its local pub, close to London’s Oxford Circus, as revealed by the 

Asda is the latest — and  biggest — jewel in the TDR crown


The FT points out that TDR is yet to have a company go bankrupt, despite having previously invested in sectors hard hit by the pandemic, including discount retail and cruise ships.

“It’s an old-world portfolio, like most of the UK economy is an old-world economy,” Dale told the paper.

However, not everything it touches turns to gold. The FT details that its second fund – which was raised in 2007 – showed a net internal rate of return of just 6.9 percent by September 2020.

Speaking to the FT a private funds specialist opined: “This fund is pretty much the definition of mediocre…It’s not what people invest in private equity to get.”

The Asda buyout, however, is certain to draw attention – and interest – to the company’s future dealings.

TDR&#8217;s offices in Bentick Street, London


As for the Issa brothers, the Asda purchase is simply the latest victory in a long winning-streak; they also purchased the fast-food giant Leon for £100 million this April and were awarded CBEs in the 2020 Birthday Honours list.

Born in Blackburn, Mohsin Issa, 49, and sibling Zuber, 48, started out in their father’s garage. According to The Mirror, it wasn’t long before they branched out on their own, first renting a petrol station then buying their first forecourt, a derelict freehold site in Bury, in 2011. The same year they formed Euro Garages.

To date, the EG Group has nearly 6,000 sites in 10 countries and employs 44,000 people including at sites for KFC, Greggs, and Starbucks.

“We’ve been on the pumps, we’ve been stocking the shelves, cleaning the toilets. You do everything,” said Zuber. “And once you do the foundation work, it’s no different wherever you go in the world. It’s a petrol station; you’re selling fuel, you’re selling coffee, you’re selling convenience.”

Having stumped up just £750 million against a £6.8 billion bill, convenience is certainly something the Issas and TDR know about. For now, whether their supermarket sweep pays dividends remains to be seen.

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