‘Lancashire’s EG Group is to retain the Cooplands Bakery brand, as well as continuing to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg, Belgium and 32 sites in the UK, following a cut-price £2.07m sale of the bulk of the company to Asda’.
As well as its in-house Yorkshire bakery brand, EG will retain franchise outlets with the Starbucks, KFC, Sbarro, Chaiiwala and Cinnabon brands under the terms of the deal.
When the Asda takeover was first confirmed earlier this year, following a separate $1.5bn sale and leaseback deal for EG sites in the US, the takeover was valued at £2.3m. Asda said the discounted price “reflects adjustments agreed between the two parties as they have worked through the detail of the transaction.”
Both EG Group and Asda are co-owned by Blackburn billionaires the Issa brothers and their private equity partner, TDR Capital.
Proceeds from the deal will be used to partially refinance EG Group’s debt set to mature in 2025, the firm said. EG also took out a new $500 million term loan, due February 2028, as part of the arrangements, and said more debt refinancing would follow.
Zuber Issa said: “The sale of the majority of EG Group’s UK business to Asda represents an important strategic step for the company, enabling EG to support the continued roll out of its successful convenience retail, fuel and foodservice strategy.
“Following this transaction and the successful extension of the debt maturities to February 2028, EG Group will benefit from a sustainable capital structure from which to build for the future.”
The completed deal marks the latest efforts by the Issa brothers to reorganise their sizeable debts. In May, EG said it expected the Asda deal to reduce total net debt from $9,801m in March 2023 to $5.4 billion post-merger.
