Euro Garages owner EG Group appears to be in the box seat to buy Woolworths’ $1.8 billion petrol station operations as the supermarket giant’s discount department store Big W remains in the spotlight.
Investment bank Citi is working for EG Group, a British retailer based in Blackburn that operates petrol stations in Europe and the US.
EG Group, Canada’s Couche Tard and Britain’s DCC had all been said to be in talks about an acquisition. But now both DCC and Couche Tard are believed to have fallen away.
Woolworths, which released its first quarter sales figures for the quarter yesterday, is understood to have pushed back any initial public offering plans for its petrol stations into next year, although some say a trade sale could still happen before Christmas with volatile conditions reaping havoc on the markets.
UBS and Morgan Stanley are involved and DataRoom understands Woolworths is hoping for a price higher than the 6.5 times EBITDA multiple at which rival Viva Energy floated.
However, Viva’s share price has since languished, partly due to the rising cost of petrol.
Woolworths planned to sell its petrol station portfolio to BP for $1.8bn a year ago, but the deal to sell the 531 services stations was blocked by the Australian Competition & Consumer Commission.
Meanwhile, it is no secret that Woolworths has other asset sales on its agenda: the Bruce Mathieson-backed ALH Group joint venture and discount department store Big W.
The loss-making Big W recorded a 2.2 per cent gain in same store sales for the quarter, and the supermarket giant has been moving to invest in the business in the hope of landing a buyer.
Private equity funds such as Kohlberg Kravis Roberts, TPG Capital and Blackstone have all looked in the past. However, it is now thought that the most interested suitor is the US-based opportunistic private equity firm Platinum Equity. Last year Platinum purchased the Staples office supplies business. Big W is not on the market, but should Woolworths launch a sale process, Platinum would be an eager buyer.
Extracted from The Australian