Wednesday 8 June 2022

Major Oil Producer Eyeing MFG Forecourts

Motor Fuel Group (MFG), the forecourt giant that was put up for sale by its private equity owner earlier this year, has reportedly attracted interest from one of the world’s biggest oil producers.

According to Sky News, the Abu Dhabi National Oil Company (ADNOC) is lining up bankers to work on a potential offer for MFG, which has a price tag of around £5bn.

City sources are quoted as saying that ADNOC had yet to make a firm decision about whether to bid ahead of an initial deadline this week. However, they said it was preparing to hire JP Morgan to advise it on its interest in the UK company.

ADNOC, which is among the 20 biggest oil companies in the world, would be a significant player in a bidding war for a company that has rapidly grown its estate and profitability under the ownership of Clayton, Dubilier & Rice (CD&R), which acquired Morrisons last year.

MFG is currently embracing the transition to cleaner energy and has committed to spending £50m this year on installing hundreds of electric vehicle charging points across its roughly-900 sites.

If ADNOC does bid for MFG, it is expected to face a fight with Fortress Investment Group and Macquarie, the Australian financial services behemoth which recently bought Roadchef, the motorway services operator, for about £1bn.

However, Sky News noted that it was not certain a sale will go ahead given the difficult financing markets. Sources stated that CD&R will only proceed with a sale if it can secure an attractive valuation.

NamNews Implications:
  • From a NAM’s eye view, MFG are heading for a period of uncertainty.
  • Which will end upon receipt of an ‘attractive valuation’ (£5bn).
  • Then a 6 month ‘Settling-in period’ following the sale.
  •  Meaning a probable shift to short term strategies/Initiatives by suppliers…
#FuelDistribution #FuelOwnership

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