Self-made billionaires Mohsin and Zuber Issa have launched an audacious swoop to expand their petrol station empire.
The ‘rags to riches’ brothers from Blackburn are trying to buy Caltex Australia, muscling out a rival bid from Canada’s Alimentation Couche-Tard.
If successful, it would be their biggest takeover to date, following a string of recent deals.
From rags to riches: Tycoon Zuber Issa, left, with his brother Mohsin, from Blackburn are trying to buy Caltex Australia, muscling out a rival bid from Canada’s Alimentation Couche-Tard
Through their business EG Group – better known as Euro Garages – the pair have embarked on a debt-fuelled expansion spree over the past two years, snapping up foreign rivals.
Recent purchases include 621 petrol stations and convenience stores formerly owned by Cumberland Farms and Fastrac in the US, as well as 540 from Woolworths in Australia.
They own about 5,400 sites across Europe, America and Australia, employing more than 35,000 staff. And now they want to add 1,900 Caltex sites, as part of a huge cash and shares takeover.
EG has offered £2billion in cash and separate shares in a new company – but did not reveal how much the total bid was worth. Caltex is considering the offer, which is competing with a £4.5billion bid by Couche-Tard.
The move is just the latest twist in the extraordinary rise of the Issa brothers, whose parents moved from India to Lancashire in the 1960s to work in a woollen mill.
The brothers were born in Blackburn and started Euro Garages 25 years ago with a £150,000 site in Bury.
Their firm is now Europe’s biggest independent fuel retailer, boasting annual sales of £10billion and tie-ups with Sainsbury’s, Greggs, Spar, Starbucks, Subway and Burger King. It expanded rapidly by snapping up petrol stations previously run by BP, Esso and Shell.
EG’s success has made the siblings two of Britain’s richest entrepreneurs with a combined fortune of £1.2billion, according to the Sunday Times Rich List.
The pair have used some of their spoils to buy a £25million mansion in Knightsbridge, central London, formerly owned by conman Achilleas Kallakis, a far cry from the two-up, two-down terraced house they grew up in.
From a Blackburn terrace to a £25m Knightsbridge mansion
£25m London house: Formerly owned by conman Achilleas Kallakis, it has planning permission for a three-storey basement extension
They have gone from a terraced house in Blackburn to owning a glamorous £25million mansion in Knightsbridge.
Childhood home: The Blackburn terrace
But tycoons Mohsin and Zuber Issa have been dragged into a row over their plans for five identical ‘McMansions’.
The three-storey properties are being built after they bought and knocked down eight homes on a site in Blackburn.
Their proposals were backed in September despite neighbours arguing the design was out-of-kilter with other properties nearby.
Blackburn with Darwen council is said to have received 30 letters of complaint about the plans, and none in favour.
The mansions are just under three miles away from the Issas’ childhood home.
It also has planning permission for a three-storey basement extension that is expected to include a garage with a vehicle lift, a swimming pool and cinema.
Above ground, the property already features grand reception rooms and a master bedroom suite that takes up the whole second floor.
However, the pair have said they intend to stay close to their roots and normally live in large, neighbouring detached houses on the outskirts of Blackburn.
Zuber, 47, said in 2018: ‘People are always asking when we will move to London or Manchester. But the quality of life [in Blackburn] is great. A lot of people do a few years in London then come to the North West.
‘They want to raise a family and have less pressure.’
Mohsin, 48, who is married with two children, added last year: ‘We could achieve everything we want from a business perspective, but if we didn’t do it with a stable family environment, if we didn’t give back to others, we would feel we had not fulfilled our potential.’
In October, it emerged they could float EG on the stock market for £10billion, meaning the two men’s 56 per cent stake could be valued at more than £5billion.
The swoop on Caltex is a headache for Couche-Tard, which is doing due diligence on the Australian firm’s books and claimed its previously unopposed offer was the best on the table. It is expected to force the two rivals into a bidding war, helping to boost Caltex’s shares.
However EG could face regulatory hurdles over its bid to combine its 540 Woolworths sites with Caltex’s outlets.
Australia’s competition watchdog in 2017 blocked BP, an existing retailer in Australia, from acquiring the Woolworths’ network because of competition concerns.
An EG Group spokesman said its proposal showed it was ‘well-placed’ to bid for Caltex.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.