EG, Blackburn petrol station giant, mulls £4.5bn Oz deal

Blackburn-based global petrol station and convenience store giant EG Group is considering its biggest-ever acquisition with a £4.5 billion move for Caltex Australia, according to a Bloomberg report.

Privately-held EG Group was founded with a single petrol station in Bury as Euro Garages in 2001 by brothers Zuber and Mohsin Issa but has grown fast through a series of debt-fueled deals.

The group now operates almost 5,000 sites across Europe, United States and Australia. 

Bloomberg reported that any offer for Caltex Australia could start a takeover battle with Canadian convenience-store giant Alimentation Couche-Tard Inc, whose initial bid for Caltex was rejected.

Ratings agencies have raised concerns about the pace of EG’s acquisitions. EG Group has about £7.3 billion equivalent of debt, according to data compiled by Bloomberg.

The report said that EG Group, whose stakeholders include private equity firm TDR Capital, has not made a final decision on whether to bid for Caltex, and there is no certainty it will proceed with a firm offer.

EG Group and Caltex declined to comment.

In October, Bloomberg also reported that EG Group may proceed with an initial public in 2020 that could value the company at about $12.44 billion.

TDR Capital bought a stake in EG Group in early 2016 for $1.43 billion when it was still known as Euro Garages.