One of Sweden’s biggest buyout funds is poised to battle with KKR, the original “Barbarians at the Gate”, as Britain’s largest petrol forecourt operator goes under the hammer.
EQT is running the rule over Motor Fuel Group (MFG) alongside a clutch of others including the infrastructure arm of KKR and Beijing-backed Chengdu Xingcheng Investment Group, according to City sources.
US buyout firm Clayton Dubilier & Rice (CD&R), MFG’s current owner, is understood to have slapped a £4.6bn price tag on MFG, which runs more than 900 forecourts under Shell, BP, Esso, Murco, and Texaco brands.
One source with a close understanding of MFG’s business questioned whether bids would be significantly more than £3.5bn, however.
Fortress Investment Group, whose billionaire founder Wes Edens co-owns Aston Villa, is also believed to be in the running. The US fund was pipped by CD&R in a bidding war for Morrisons supermarket last year and is keen to invest in a UK business.
KKR inspired the book Barbarians at the Gate about the Wall Street firm’s pursuit of US conglomerate RJR Nabisco in 1989.
CD&R is understood to want to complete a deal to sell MFG by the end of the year, before it is forced to offload more than 100 Morrisons forecourts to satisfy demands by the Competition and Markets Authority.
One senior City source said that CD&R could wait until later this year before completing the acquisition of Morrisons in the hope that debt markets may be more favourable.
Investment banks that provided initial bridging loans to fund the deal will not want completion to go beyond December 2022 as they will need to account for them in annual filings, sources added.
The Telegraph reported earlier this month that suitors for MFG are wary that the Government could intervene over concerns that private equity owners would jack up prices at the pumps.
Nevertheless, infrastructure investors are believed to be particularly attracted to forecourt operators despite the UK being less than eight away from a ban on the sale of petrol and diesel vehicles.
Switching sites from petrol to electric charging presents a significant opportunity. It is hoped that drivers will spend more money on food and drinks while they wait for their car to charge.
One of EQT’s investments is Basingstoke-based InstaVolt, which lays claim to having the UK’s biggest public charging network.
EQT, KKR, CD&R and MFG declined to comment. Chengdu Xingcheng did not respond.
