Lone Star Mulls Sale of Gas Retailer MRH as IPOs Surge

  • U.K. gas-station operator could be worth about $2 billion
  • Lone Star is working with investment bank Lazard on IPO plans

Lone Star Funds is considering an initial public offering of U.K. gas-station operator MRH GB Ltd. that could value the business at about 1.5 billion pounds ($2 billion) amid a revival of stock sales in Europe, people familiar with the matter said.

The U.S. private equity firm has picked investment bank Lazard Ltd. as financial adviser for a potential London listing, the people said, asking not to be identified as the information is private. Lone Star is also talking to underwriting banks about mandates, the people said. No final decisions have been made and Lone Star may decide to hold on to the business for longer.

European companies are flocking to list this quarter to capitalize on investor appetite after political uncertainty subsides in key markets including Germany, France and the U.K. TI Fluid Systems Ltd., a U.K. automotive-parts company owned by Bain Capital, and Novares, a supplier of plastic components for cars owned by Equistone Partners Europe Ltd., announced IPO plans Monday.

Representatives for Lone Star and Lazard declined to comment.

Investors have been increasingly focusing on assets such as petrol stations, attracted by stable and more predictable returns. Abu Dhabi National Oil Co. is preparing an IPO of its service stations unit that could value the business at as much as $14 billion, people familiar with the matter said in July.

Lone Star completed the purchase of MRH in January last year for an undisclosed amount. In 2015, buyout firm TDR Capital took a minority stake in rival Euro Garages, one of the largest independent forecourt operators in the U.K. with a portfolio of over 340 sites.

MRH is the largest independent petrol station operator in the U.K. with over 450 company-owned sites, according to its website. Lone Star runs 17 private equity funds with total capital commitments of over $70 billion.

Companies have priced $44.8 billion of IPOs this year in Europe, according to data compiled by Bloomberg, up from $32.4 billion in the same period last year. Among other deals in the pipeline for this year, SMCP, the owner of French fashion chains Sandro, Maje and Claudie Pierlot, said Monday it plans to sell at least 517 million euros ($607 million) of stock. In Italy, Pirelli & Co. went public last week, and as many as 12 other IPOs are slated to start trading on the market by the end of the year.

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