Petrol forecourts giant EG Group, founded by brothers Mohsin and Zuber Issa and backed by TDR Capital, is set to initiate formal plans next week for a $9 billion US stock market listing, with an aim to raise approximately $1 billion. The listing is expected to take place this year, potentially under the name Cumberland Farms, which is a US forecourt retail operator owned by EG Group. Banking sources indicate that Barclays, Bank of America, Goldman Sachs, JP Morgan, and Morgan Stanley are likely to be involved in the selection process for advisers.
EG Group, which operates roughly 4,300 sites globally and employs about 33,000 people, has been actively divesting assets to reduce its debt, including offloading most of its UK sites to Asda, selling operations in Italy, and progressing with the sale of its Australian unit. This strategic shift reflects a growing focus on the US, which has become the company's largest single market. Its global headquarters are moving to Charlotte, North Carolina, and its chief executive, Russell Colaco, is based in the US, making a US listing more logical than a London flotation.
Despite these plans, there have been some conflicting reports. Zuber Issa, a co-founder, notably expressed a desire for EG Group to sell its US assets, including over 1,500 convenience stores, to accelerate debt reduction. This move would contradict the company's recent strategy of prioritizing growth in the US, its most profitable market, and unifying its US c-store banners under the Cumberland Farms brand. Analysts suggest that while EG Group could still go public after selling its US assets, investors might question its future growth strategy without this key market.
The company has experienced substantial growth, serving 1 billion customers annually and generating revenues of just over $24 billion from its services including grocery, merchandise, foodservice, and fuel. Its US fuel gross profit has consistently surpassed industry standards. While the company stated that the launched IPO is not "shareholder driven", it would allow TDR Capital, which along with the Issa brothers owns roughly 50% of EG Group, to potentially realize an exit.
