Walmart (WMT) to Pick TDR as Preferred Bidder for UK Unit Asda - Bloomberg

An Asda supermarket in the Wembley district of London, U.K.

Photographer: Simon Dawson/Bloomberg

Walmart Inc. has picked a consortium backed by TDR Capital as the preferred bidder for a majority stake in its U.K. grocery unit Asda, people with knowledge of the matter said.

The investor group beat out rival private equity firm Apollo Global Management Inc. and is now negotiating details of a deal with Walmart, the people said, asking not to be identified because the information is private. TDR has partnered with the Issa brothers, the British billionaires behind gas station owner EG Group, according to the people.

Bidders had been discussing a valuation of more than 7 billion pounds ($9 billion) when the sale started earlier this year, Bloomberg News reported in March. No final agreements have been reached, and talks could still fall apart, the people said.

Representatives for Apollo, Asda, TDR and Walmart declined to comment. A representative for the Issa brothers couldn’t immediately be reached for comment. Sky News’s Mark Kleinman tweeted Monday that TDR and the Issa brothers had emerged as the preferred bidder, which would return Asda to U.K.-based ownership if the deal is completed.

Walmart, the world’s biggest retailer, has been seeking to offload Asda for at least two years and saw a 7.3 billion-pound sale to J Sainsbury Plc blocked by antitrust regulators in 2019. Walmart revived talks on a sale of the grocer in July after shelving the plans earlier in the year due to the coronavirus pandemic.

Groceries supplying essential food products are among the few retail outlets that remained open throughout the U.K. government’s coronavirus lockdown. While the start of the pandemic saw a huge boost in supermarket sales, the precautions needed to operate safely have seen costs rise as well.

Asda’s comparable sales, excluding fuel, jumped 3.8% in the three months through June. It generated record online revenue during the quarter, with online grocery sales doubling and orders for in-store pickup quadrupling.

The company increased its online capacity by 65% since March to 700,000 weekly order slots and plans to boost that further to 1 million slots next year, it said in an August statement.

— With assistance by Deirdre Hipwell, Jan-Henrik Foerster, and Ruth David

Let's block ads! (Why?)