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CD&R weighs gas station operator Motor Fuel Group IPO


(Bloomberg) – Clayton Dubilier & Rice is considering an initial public offering from Motor Fuel Group Ltd., one of the UK’s largest independent service station operators, according to people familiar with the matter.

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The private equity firm is discussing with potential advisers a listing that could put the company, also known as MFG, at over £ 5 billion ($ 6.8 billion), the people said. , asking not to be identified when discussing confidential information.

Deliberations are still in their early stages and no final decisions have been made, the people said. CD&R, which is competing to acquire British grocer Wm Morrison Supermarkets Plc, could also consider a sale, the people said. A representative for CD&R declined to comment, while a spokesperson for MFG did not immediately respond to the request for comment.

CD & R’s deliberations on MFG come amid a period of heightened activity involving forecourt operators.

Read more: UK fuel crisis eases, normalcy still several days away

EG Group Ltd., backed by TDR Capital, one of the world’s largest independent gas station and convenience store chains, is investigating a possible sale that could value the company at around $ 15 billion, Bloomberg reported. News this month. Seven & i Holdings Co., the Japanese company that controls 7-Eleven, has completed its $ 21 billion purchase of Speedway gas stations from Marathon Petroleum Corp. in May.

Investors behind the forecourt operators have also sought to acquire supermarket chains to generate synergies between the two businesses. Alimentation Couche-Tard Inc., the Canadian owner of forecourt operator Circle K, unsuccessfully attempted to buy French grocer Carrefour SA earlier this year. At the end of 2020, Asda Group Ltd. considered selling some of its gas stations to EG Group, whose owners had just made a separate deal to buy the British grocer.

MFG has more than 900 stations operating in the UK under major oil brands, including BP Plc and Esso, according to its website. The company saw normalized earnings before interest, taxes, depreciation and amortization increase 16.7% to £ 299.2 million last year.

The UK is in the midst of a fuel shortage which has seen many petrol stations run dry and cause angst and disruption for motorists. Prime Minister Boris Johnson said on Tuesday that supplies were returning to the forecourt and the situation was stabilizing. Around 37% of service stations represented by the UK Petrol Retailers Association said they ran out of fuel on Tuesday morning, up from more than 50% on Sunday.

Like other retailers, MFG is preparing to move away from fossil fuels. It plans to deploy more charging centers for electric vehicles as it shifts to a dual-fuel strategy over the coming decades.

(Adds details of UK fuel crisis, MFG strategy in last two paragraphs.)

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