Asda owner TDR Capital is reportedly among potential bidders for Costa as Coca-Cola mulls a sale of the coffee chain.
According to the Financial Times, TDR Capital, which became the majority owner of Asda last year with a 67.5% shareholding in the supermarket chain, is one of a small number of private equity firms circling Costa.
It joins reports that Apollo Management Group, the owner of Wagamama’s parent company The Restaurant Group, and US-based private equity investor KKR have also held initial talks with Lazard, Coca-Cola’s adviser.
Last week, Sky News reported Coca-Cola is exploring a potential sale of Costa just five years after acquiring it from Premier Inn owner Whitbread in a £3.9bn deal.
It is not the first time TDR has expressed interest in the coffee chain, having previously explored a deal through its petrol forecourt business, EG Group, in 2018.
The latest sale talks come as Coca-Cola reported a 3% decline in coffee sales last year, primarily due to the performance of Costa in the UK.
During Coca-Cola’s second-quarter earnings call last month, CEO James Quincey said Costa had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view”.
He added: “We’re in the mode of reflecting on what we’ve learned, thinking about how we might want to find new avenues to grow in the coffee category.”
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