Gulf PE firms fight for Saudi supermarket chain Al Raya

Dubai

THREE of the Gulf's biggest private equity (PE) firms are battling it out for a majority stake in Saudi supermarket chain Al Raya For Foodstuff Co, three sources with knowledge of the matter said on Tuesday, with a deal likely worth as much as US$300 million.

Abraaj Group, Fajr Capital and Gulf Capital are in the running to acquire the stake in the grocer being sold by Dubai-based Levant Capital and The Rohatyn Group (TRG). These three lodged initial bids in late July and are now due to file more comprehensive proposals before the deadline for second-round bids in the next two weeks, the sources added.

Abraaj and Fajr declined to comment, as did Levant Capital and TRG. Gulf Capital didn't immediately respond to a request for comment. The sources spoke on condition of anonymity as the information isn't public.

Should the final price tag be US$300 million, the stakeholders would have tripled their investment in around three years.

Levant Capital and Citi Venture Capital International, an emerging market-focused investment firm which was acquired by TRG in December 2013, originally bought the stake in Al Raya in 2012 for US$100 million.

The sale is expected to go ahead despite disruption in the kingdom's economy from falling oil prices and subsequent lower government spending, the sources said. REUTERS