Different roads open up for the Issa brothers

By Ged Henderson

28 Jan 2025

Zuber and Mohsin Issa

They may have gone their separate business ways but as 2024 came to a close there were no signs that the Issa brothers were losing their appetite for dealmaking.

Zuber Issa, the co-founder of EG Group and former co-owner of Asda, was making headlines amid reports of his efforts to strike his first acquisition since the breakup of the business empire built with his brother Mohsin.

Meanwhile, Mohsin was in the news over the launch of a Jersey based private investment fund looking to bring new opportunities for innovation-driven businesses.

And that was followed by further reports that both brothers could be in line for a big payout, with speculation that EG Group is looking at a £13bn listing on the US stock exchange, possibly as early as this year.

It meant 2024 ended with the Blackburn brothers firmly in the media spotlight, as they have been ever since it was revealed in the summer that they planned to go in different directions after 20 years of joint success.

June saw Zuber acquire the forecourt division of Blackburn headquartered EG Group, the company he co-founded with Mohsin in 2021, in a £228m deal – It has now been renamed EG On the Move (EGOTM).

He stepped down as EG Group’s co-chief executive, leaving Mohsin to lead the business on his own, while retaining his existing shareholding and board membership as a non-exec director.

Mohsin is now sole chief executive of EG Group, today an international operator of convenience retail, foodservice and fuel stations.

Zuber also left his role on the board of Asda after completing the sale of his shares in the supermarket giant to private equity group TDR Capital in November.

The brothers had acquired Asda from US group Walmart in 2020, in a £6.8bn deal, with the backing of TDR. It now has 67.5 per cent of the
business, with Mohsin holding 22.5 per cent.

Walmart owns 10 per cent.

The business parting of the ways was never going to be the end of the billionaire brothers’ story and so it has proved.

In November it was revealed that investment bank Rabobank had become EGOTM’s “strategic partner”, providing new working capital facilities to support its “exciting growth plans”.

According to unconfirmed reports, those plans included pursuing a deal for Petrogas Group, the UK arm of Irish forecourt giant Applegreen.

Sealing a deal with Petrogas would significantly bolster EGOTM’s portfolio, adding more than 100 petrol stations across the country.

Rabobank has been serving and supporting the UK’s food and agribusiness for 40 years. EG Group has long been a long-standing client. 

In a statement announcing the strategic partnership, Rachael Hewitt, EGOTM’s chief financial officer, said: “We are delighted to secure
these new facilities to support our future growth.”

Mohsin has also been busy, according to the financial pages. He is reported to have launched Boulder Investico, a private
investment fund looking to support fast-expanding UK start-ups.

Investments are already said to have been made in second hand clothing platform GoThrift and protein powder company Applied Nutrition.

Blackburn based GoThrift runs an online fashion store where shoppers can buy vintage clothing. Global sports nutrition, health and wellness brand Applied Nutrition has its headquarters in Liverpool and recently floated on the London Stock Exchange.

The establishment of Boulder Investico has been hailed as a “significant boost for UK start-ups”.

Meanwhile, EG Group ended the calendar year revealing further progress in its work to deleverage its finances.

And as 2024 came to a close, reports emerged of a potential £13bn US
listing of the forecourt giant.

Sources suggested that the business and TDR Capital, its private equity backer, were looking at a possible listing as early as this year with
the American market favoured because of the company’s extensive operations there.

The £13bn figure reported is 13 times the group’s annual profits, which last year were £1.1bn.

In early December the group announced further progress with its strategy – refinancing $3.5bn of loans as it looked to unlock investment cash.

In a statement the company said: “These transactions follow strong recent progress with the group’s deleveraging plan, with the group completing a number of non-core asset disposals in the final quarter of 2024 and generating over $400m equivalent of proceeds to repay debt.

“This, coupled with group’s strong performance and improved free cash flow during the year, resulted in Moody’s upgrading the outlook of the business from negative to stable.”

The business grew underlying EBITDA by 10 per cent in the nine months to September 30 2024, driven by earnings growth across all
key business streams, and a “notably strong performance” in the USA.

Mohsin said: “I am pleased that we have delivered further progress with our successful deleveraging and refinancing strategy, which is
central to the execution of our strategic objectives.

“The successful repricing will materially reduce our financing costs, enabling us to invest further in the growth of the business.

“This transaction is a vote of confidence in EG Group’s strategy and performance from investors. We thank them for their continued support and look forward to pursuing the opportunities ahead of us.”

And what of Asda, where Mohsin still remains a minority owner and non-executive director?

Times are tough for the group, with a report from research group Kantar showing sales in the 12 weeks to December 1 fell to £4.3bn – down 5.6 per cent on the same period a year ago.

The gloomy figures came just weeks after its former chief executive Allan Leighton returned to the business to take over from Stuart Rose
as executive chairman.

The 71-year-old told a national newspaper it could take three to five years to revive the supermarket chain’s fortunes.

He said that his first priority was to “restore Asda’s DNA”. The former Co-op and Royal Mail chair has committed three to five years of his time to the task as “it is going to take us that long to get it right”.

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