An anxious EG Group flack got in touch with the Standard City desk this week, complaining of our reporting on “signs of an apparent rift” between owners the Issa brothers. Mohsin Issa has denied any such split, he said.
But there is one rift that is undeniable: the yawning gap between the Issas’ wealth estimates from the Sunday Times and Bloomberg.
According to the latest Sunday Times Rich List, published last weekend, Mohsin and Zuber Issa are worth a combined £5 billion, up about 7% compared to the 2021 estimate. But according to a Bloomberg report in March, the duo’s stakes in Asda and EG Group only add up to £2 billion, down “nearly 60%” over the same period.
What explains this? The short answer is debt. Using the same earnings multiple as the average for Sainsbury’s and Tesco, Asda and EG Group could be valued at a bit over £10 billion altogether, making the Issas worth about £5 billion.
But that would neglect the eleven-figure debt pile shared between the two firms.
And that matters: as Bloomberg points out, recent rate rises means EG Group is now paying an eye-watering 13% interest on some debt, while Asda has even boasted of having signed “the biggest sterling high-yield bond this year.”
These figures are only guesses at the end of the day. But for what it’s worth, Spy’s money is on Bloomberg as the better bet.
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