Motor Fuel Group owner picks banks to fire up £5bn auction

Feb 14, 2022

The owner of Motor Fuel Group (MFG), Britain’s biggest independent petrol forecourts operator, has picked a quartet of banks to oversee a £5bn sale.

Sky News has learnt that the private equity firm Clayton Dubilier & Rice (CD&R) is lining up Citi, Deutsche Bank, Goldman Sachs and Royal Bank of Canada to sell MFG.

The company, which trades from roughly 900 sites across the UK, has been striving to position itself at the heart of the drive to electrify Britain’s automotive industry.

It said recently that it would spend £50m this year on installing 350 rapid vehicle chargers across its estate.

MFG has grown substantially since CD&R bought it in 2015 from Patron Capital Partners in a deal worth about £500m.

Three years later, it paid £1.2bn to add MRH, the market leader, creating a group operating under fuel brands such as BP, Esso, Shell and Texaco.

Profits are understood to have risen about tenfold since CD&R’s original acquisition of MFG.

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The company has invested heavily in its convenience retailing proposition, featuring the likes of Costa Coffee, Greggs and Subway at many of its sites.

The CD&R-owned company competes with supermarket-owned fuel chains, as well as the likes of EG Group, which is owned by Mohsin and Zuber Issa in conjunction with TDR Capital.

EG is undertaking a review of its strategic options, while Rontec, the group controlled by Gerald Ronson, has also been periodically linked with a sale.

MFG’s increased focus on electrification could appeal to infrastructure investors who could seek to partner with each other to bid for the company.

A deal could also attract interest from oil companies attempting to harness the global energy transition, they added.

A public listing of MFG is also a possibility, although it is understood to be less likely than a sale.

MFG is run by William Bannister, who acquired the business in 2011 through a management buy-in, while it is chaired by Alasdair Locke, a serial entrepreneur in the energy industry.

A sale of MFG will represent a successful exit for CD&R, which emerged triumphant last year from an auction of Wm Morrison, the supermarket chain – a deal valued at close to £10bn including debt.

CD&R declined to comment.

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