The co-founders of EG Group and TDR Capital have moved into pole position in the race to buy Asda. 

The consortium has been selected by Asda’s current owner Walmart as the preferred bidder, according to Sky News, and a deal valuing the grocer at more than £6.5bn could be formally announced within weeks. 

EG Group’s owners, brothers Moshin and Zuber Issa, have built one of the UK’s largest petrol station operators.

Earlier this month, Asda revealed it had struck a deal with EG to open a handful of Asda On the Move convenience stores on its petrol station forecourts. However, the supermarket giant insisted the move was unrelated to the ongoing sale process. 

But City sources suggested the Isaa brothers and TDR had muscled their way to the front of the queue in the high-profile auction for Britain’s third-largest supermarket chain. 

Private equity giant Apollo Global Management had been working with former Debenhams chief Rob Templeman on a bid, while Lone Star Funds, which had enlisted the help of ex-Asda boss Paul Mason, dropped out of the running last week.

The sale of a controlling stake in Asda would return it to private ownership for the first time since 1999, when it was bought by US titan Walmart in a £6.7bn deal. 

Walmart has been attempting to offload a majority stake in the business for a number of years and reduce its exposure to the fiercely competitive UK grocery market.

It had lined up a mega-merger with British rival Sainsbury’s, only for that deal to be blocked by the Competition and Markets Authority (CMA) in April last year. 

The Issas and TDR Capital are understood to want to retain Asda’s current chief executive Roger Burnley should they complete the deal.

The consortium is being backed by a syndicate of lenders including Barclays, Lloyds, Morgan Stanley and ING.