Fuel and convenience retailing have thrust the nation’s 12th largest private company, Peregrine Corporation, into the crosshairs of private equity giants believed to include KKR & Co.

Street Talk understands KKR is circling the South Australian company in the hope of prying loose its On The Run Convenience Operations, spanning 130 fuel and retail outlets and brands including Moe’s Dog & Shake and Smokemart. The convenience centre business also houses fast food franchises within its “multi-offer format” including Subway, Oporto and Hungry Jack’s.

But it’s not a small bite.  IBISWorld’sTop 500 Private Companies list estimates that Peregrine has total revenue of $2.1 billion and more than 2800 staff, and On The Run is said to be mainstay of the group’s operations.

KKR is said to be running the numbers to size up new opportunities in the space while also keeping a keen eye on developments over at oil major BP. The latter is trying to get a transaction to buy Woolworths’ chain of petrol stations across the line with regulators.

In December, the competition regulator torpedoed BP’s $1.8 billion deal even after it offered to offload some sites. The company then turned to its lawyers to consider a legal challenge of the ruling or a bigger swathe of site divestments that would potentially allow the deal to go ahead.

A company spokesman said it had not received any private equity approaches.

The On The Run website highlights the retail aspect of the operations and that the majority of the group’s customers “do not purchase fuel but visit us to buy non-fuel items.”

“Due to our market penetration and diversified customer base, our suppliers and partners recognise On The Run as the preferred platform to launch new products and brands,” the website says.

Peregrine’s empire also includes freehold property and a wholesale fuel unit, which may not be as enticing for private equity, and could be excluded from any proposal put to the Shahin family.

In Adelaide, the family is well known but did confront controversy last year when it sought approval for a seven-storey office tower in Kensington and met with community opposition.

Elsewhere, Citigroup’s Australian real estate team emerged as the adviser to Singapore-based ARA Asset Management on the purchase of a $405 million stake in Cromwell Property Group.

Cromwell announced on Thursday morning that ARA had acquired the 19.5 per cent stake of Cromwell’s biggest shareholder, South Africa’s Redefine Properties.

Extracted from Australian Financial Review.