Asda owner claims value of stake has risen 20-fold as it prepares bid for Boots

Asda
// Asda private equity owner claims value of its investment in the grocer rose by nearly 20 times
// TDR Capital said its stake as co-owner of the grocer was now worth £1.4bn on paper

The private equity owner of Asda has claimed the value of its investment in the grocer has increased by nearly 20 times as it readies a potential bid for the pharmacy chain Boots.

TDR Capital said its stake as co-owner of the supermarket chain was now worth €1.7 billion (£1.4 billion) on paper or 19.8 times its original investment.

This indicates that the finance group put in just over £70 million of cash to back the deal.


READ MORE: Asda finance boss quits and will be replaced by Morrisons CFO


Asda is currently gearing up to potentially raise more funds to back a £6 billion buyout of Boots.

The details behind the claim are not clear, as TDR put in an estimated £390 million of equity in total to back the £6.8 billion buyout of Asda, the same amount as its partners the Issa brothers.

Industry insiders said the £70 million of fresh investment in the Asda buyout indicated by TDR’s documents could have been supplemented by proceeds from other investments including EG Group, the petrol forecourts business it also owns in partnership with the Issa brothers.

The value of TDR’s stake was thought to have been increased partly to reflect the £7 billion buyout of Morrisons in October which valued that chain at a higher amount relative to core earnings than the original Asda deal.

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