Private equity firm Lone Star drops out of race to buy Asda

The two private equity firms have been lodged in a tussle over the UK supermarket chain giant since parent company Walmart put a majority stake for Asda on the market last month.

Retail veterans Rob Templeman and Paul Mason were both tapped up by the rival firms, with the former Debenhams chief executive teaming up with Apollo, and Asda’s former boss working for Lone Star. 

However, Lone Star is reported to have pulled out of the race, having failed to meet Walmart’s valuation for Asda, according to The Telegraph. 

The world’s largest retailer, Walmart, was forced to put Asda up for sale after its proposed merger with Sainsbury’s was blocked by the Competition and Markets Authority (CMA) last year. 

The competitions watchdog warned at the time that the tie-up, which would have created Britain’s largest supermarket by market share, would be “expected to result in a substantial lessening of competition”.

Sainsbury’s had agreed to spend £7.3bn to acquire Asda from Walmart, but the supermarket chain has not been able to attract similarly high bids on the private equity market. 

UK-based private equity firm TDR Capital had been mooted as a third suitor, but it is unclear whether it too has dropped out of the running.

Walmart is expected to retain a minority stake in Asda.