Global private equity firm Kohlberg Kravis Roberts and PetroChina are believed to be lining up to buy Woolworths petrol stations in the likely event the deal the supermarket group has on the table with BP will collapse.

BGH Capital — the fund started by former TPG Capital Australia boss Ben Gray and partner Simon Harle along with former Macquarie investment banking boss Robin Bishop — may also be in the mix, according to sources.

The Australian Competition and Consumer Commission has taken exception with the planned sale of the 531 petrol stations Woolworths owns to BP for $1.8 billion, arguing that it would lessen competition and have an impact on petrol pricing.

BP has been contemplating a move to take the competition watchdog to court in a further attempt to gain ownership of the assets.

However, the expectation around the market now is that the deal is unlikely to go ahead.

Woolworths presently operates 531 sites and has 12 sites in development. BP supplies fuel to approximately 1400 BP-branded service stations throughout Australia, setting fuel prices at roughly 350 of them.

With the discussions surrounding the deal stretching out for more than a year, both parties signalled they were prepared to offload some of the service stations — thought to be 130.

But the offer has not appeared to appease the ACCC, with chairman Rod Sims describing BP’s prices higher on average than Woolworths prices in the major capital cities and believes fuel prices would likely increase under BP’s ownership.

KKR is said to have circled other retail assets in the past, including Wesfarmers stationery business Officeworks, and is thought to be eager to look at Steinhoff’s Australian retail businesses, including homewares retailer Freedom and Fantastic Furniture when they are anticipated to be placed up for sale.

It closed a $US9.3 billion fund focused on investments across the Asia Pacific region last year compared to its earlier fund raise for Asian Fund 11, which was $US6bn, so has money that needs to be put to work

Some were questioning last week whether PetroChina was eager to buy the Woolworths petrol stations after speculation emerged that a Chinese party was interested in the assets.

PetroChina is the listed arm of state-owned China National Petroleum and has recently been buying petrol stations as part of its global expansion plans.

BGH Capital, meanwhile, is said to have recently raised more than $2bn for his new fund, so market analysts say that it makes sense that the group, run by the deal-making veterans, makes a move.

Woolworths has been advised on the sale of its petrol stations by Morgan Stanley.

Caltex was a suitor for the assets when they were up for sale in 2016, advised by UBS, but some in the market are doubtful it will return as a suitor.

Extracted from The Australian