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Private equity-backed gas station company EG Group has fired its first shot at a New York Stock Exchange listing, which is expected to go public as early as this year.
The initial public offering, which could value the business at about $13 billion, would allow TDR Capital to cash in on some of its investments more than a decade after it first backed Blackburn’s billionaire Issa brothers.
Zuber Issa, who co-founded EG with his brother Mohsin but stepped down from the board last year, told the Sunday Times that “the roadmap is now starting” for the IPO, which is expected to happen this year or next. after considering various options for the group for some time.
EG would likely float under the name Cumberland Farms, the US convenience store operator it bought in 2019, a person familiar with the matter confirmed.
The decision by two of Britain’s most prominent entrepreneurs and TDR to list their operations in the US would be another blow to the London Stock Exchange, which is struggling with a drought of new deals and high-profile defections.
The brothers started with a single gas station near where they grew up in Blackburn, Lancashire in 2001. They have grown the business at breakneck speed to more than 5,500 locations in nine countries, partly through debt-fueled acquisitions made possible by their relationship with TDR.
TDR and Issa now own about 50 percent each of EG.
Zuber said the choice of New York was driven by the fact that despite the business’ roots in northern England, more than half of its earnings are now in the US.
He also cited the presence of other listed rivals in North America, such as Canada’s Alimentation Couche-Tard and Nasdaq-listed Casey’s General Stores, making it easier for investors to compare performance. There in 2022 it was a guess that Alimentation Couche-Tard and EG were in merger talks.
“If we still had (the majority of) our assets in the UK, we would have had much more insight into the UK IPO,” Zuber told the Sunday Times.
EG no longer has stores and petrol stations in the UK, having sold most of them to supermarket group Asda, a sister business also owned by TDR Capital and Mohsin.
EG, where Zuber remains a shareholder and non-executive director, posted an underlying profit of $1.1 billion for the year to December 31, 2023, on revenues of $28.3 billion. It also reduced its net debt burden from about $10 billion in January 2023 to $5.3 billion at the end of September last year.
Although the brothers only entered into an agreement to buy Asda from Walmart with TDR in 2020, Zuber sold his stake to a private equity group last year, formalizing the split.
Zuber suggested that his reason for pulling out of EG was driven by TDR’s desire to conduct the IPO at a faster pace than it was comfortable with. Mohsin now leads EG as sole CEO.
“TDR has been supporting EG since 2014 and whatever EG decides (to do) is driven by the board of directors and a decision made by the company,” said a person close to TDR.
“The idea that this is driven by shareholders is quite a stretch. It’s not about exiting, it’s about setting up the business for the (next) phase of growth.”
TDR and EG declined to comment.