The billionaire Issa brothers who own Asda have bought the British fast food chain, Leon.
More than 70 Leon restaurants across the UK and Europe have been sold to the brothers’ giant petrol forecourt business EG Group. In a joint statement, Mohsin Issa and Zuber Issa said the firm was a “fantastic brand we have long admired”. Leon boss John Vincent, who co-founded the firm in 2004, said: “In some ways this is a sad day for me.”
“We have tried hard, done some good things, made a healthy amount of mistakes, and built a business that quite a few people are kind enough to say that they love,” he added. The deal includes 42 company-owned restaurants, as well as 29 franchise sites which are mainly found in airports and train stations across the UK and a handful of European countries such as the Netherlands and Spain. The group has also committed to keeping on Leon’s management team and staff.
EG Group said that the acquisition, reportedly worth up to £100m according to the Mail on Sunday, is “complementary” as it seeks to expand the food side of its business. It already operates more than 700 food outlets in the UK and Ireland, including branches and “drive-thrus” for KFC, Starbucks and Greggs. In a statement, EG Group said it planned to open about 20 new Leon outlets a year from 2022. It also cited the importance of Leon’s cookbooks, own-brand groceries and ready-meals sold in supermarkets.
Mr Vincent said on Sunday that he has “had the pleasure of getting to know Mohsin and Zuber [Issa] across the last few years. “They have been enthusiastic customers of Leon, going out of their way to eat here whenever they visit London. They are decent, hard-working business people who are committed to sustaining and further strengthening the values and culture that we have built”. The Asda deal has understandably attracted the most attention, but this is the latest example of EG Group’s wider strategy in growing its non-fuel and food service operations. The Issa brothers’ statement today certainly gave no indication they’re finished yet.
It was already apparent they were also interested in adding to their menu of café and restaurant brands. They have shown a taste for Caffè Nero, although the coffee chain rejected their bid in November – shortly after launching a company voluntary agreement (CVA). John Vincent has been open about how tough the past year’s lockdowns have been for the brand he started 17 years ago, and Leon’s outlets are most concentrated in London. Locations such as Canary Wharf, London Bridge railway station and Heathrow Airport seem unlikely to experience a return to pre-pandemic levels of trade soon. Under EG Group’s plans, it’s now set to expand into both new geographical and – with possible drive-throughs – operational areas. The Issa brothers, two entrepreneurs from Blackburn, in February completed a deal to buy Asda, Britain’s third-largest supermarket chain, from US owners Walmart.
It was valued at £6.8bn, but the brothers and the investment firm TDR Capital paid just £780m. The deal is still awaiting approval from the UK’s Competition and Markets Authority, which is expected by the summer. As part of it, Asda’s 323 petrol stations will be sold for £750m to EG Group, adding to the portfolio of more than 6,000 around the world. In 2020, questions were raised about the group’s finances after its auditor, Deloitte, suddenly quit in October and was replaced by KPMG. EG Group said the auditor had signed a “clean audit” for EG Group’s 2019 financial accounts and there had been “no disagreements on any auditing or accounting matters”.