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D-Day looms for Asda takeover bids

Asda - Toby Melville/Reuters
Asda - Toby Melville/Reuters

The future of Asda could be decided this week, as private equity firms finalise bids for the £6.5bn supermarket chain.

Rivals Apollo Global Management and Lone Star Funds are understood to have been preparing offers to buy Britain’s third largest supermarket from US giant Walmart. Bids are due on Monday.

Both companies drafted in retail veterans to help advise on their offers, hiring Rob Templeman, the former boss of Debenhams, and Paul Mason, ex-Asda CEO, respectively.

The two firms had been seen as the only two likely bidders in the race, although there has been talk of potential further interest from a third bidder such as the owners of EG Group, Blackburn’s Issa brothers.

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Walmart has been seeking a way to offload the operations to allow it to focus on other, more lucrative markets such as India.

Asda_Walmart Share of market
Asda_Walmart Share of market

The US giant has also been linked to a possible deal with Microsoft to acquire the international operations of TikTok, the social media app owned by ByteDance of China.

Asda, EG Group and Apollo declined to comment. Lone Star did not respond to requests for comment. The process to sell Asda was kicked off after plans to merge the supermarket with Sainsbury’s were blocked by competition regulators last year.

However, talks with private equity firms had to be temporarily paused earlier this year, due to the Covid-19 pandemic. They ramped up again over the summer.

Walmart is expected to keep a minority stake in Asda if a private equity sale goes ahead.