Lone Star bows out of race for gro­cer Asda

The Daily Telegraph - Business - - Front Page - By Oliver Gill and Laura Onita

US PRI­VATE eq­uity fund Lone Star has dropped out of the race to buy Asda, leav­ing ri­val Apollo in pole po­si­tion to take con­trol of Bri­tain’s third big­gest su­per­mar­ket.

Lone Star was un­able to match the price sought by Asda owner Wal­mart, City sources said.

A third pri­vate eq­uity suitor, UK-based TDR Cap­i­tal, re­mains in the run­ning.

Bid­ding is ex­pected to come to a cli­max this week, ac­cord­ing to in­sid­ers.

Plans to hand the firm to a pri­vate eq­uity owner have sparked con­cerns among some re­tail an­a­lysts, who fear it could be loaded up with debt raised against its net­work of nearly 700 stores.

Clive Black, of bro­ker Shore Cap­i­tal, said: “If a lot of the free­holds were turned into rents for Asda to pay … we could be talk­ing about the death of Asda down the line.”

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