From one petrol station to a $1.1b payday

The Shahin family, which on Wednesday struck a $1.15 billion deal to sell their On The Run service station and convenience store operations to Viva Energy, had a unique start in business.

The late Fred Shahin (pictured above)had been an auditor and logistics manager for the United Nations in Lebanon helping Palestinian refugees. But he finally tired of the war-torn strife, and four decades ago fled to Australia with his wife, Salma.

Arriving in Adelaide in 1984, he couldn’t find a job. He answered an advertisement in the local newspaper, The Advertiser, looking for buyers of a BP petrol station in the working-class suburb of Woodville Park.

One big plus was that it came with a house next door in a package deal, so the family had somewhere to live. It killed two birds with one stone.

One of his sons, Yasser Shahin, who later founded the On The Run brand in 1999 after becoming frustrated at the slender margins in petrol retailing and deciding that the family needed to branch out into selling more convenience goods, said on Wednesday that Fred had been an inspiration and a meticulous book-keeper and strategist.

Yasser Shahin told The Australian Financial Review the original advertisement was framed and hung on the wall in his office in Adelaide. He had been looking at it on Wednesday morning as the Viva deal was announced to the ASX. “It’s right here in my office,” he said.

“Freehold service station workshop and adjoining property for genuine sale. Excellent opportunity for a family investment,” the advertisement reads.

“We grew up there,” Yasser Shahin said of the Woodville Park site. The same site has since been refurbished and rebadged as an OTR and still operates as a petrol station and convenience store.

Fred Shahin died in 2009 and his three sons, Charlie, Yasser and Sam, have been steadily building the parent company Peregrine Corporation, which besides OTR also has extensive commercial property interests, and the tobacco and giftware retail chains Smokemart and Giftbox.

Yasser Shahin on Wednesday paid tribute to the courage of his hard-working father, who built the foundations of the family empire named after the bird of prey, the Peregrine falcon.

Charlie and Fred Shahin at their original Woodville Park petrol station.

“He’d be very proud,” Yasser Shahin said. But the late Fred Shahin was also pragmatic and so would have endorsed the sale. “I think he’d realise there comes a time,” to seize the opportunity when the right offer arrived, he said.

Fred Shahin arrived in Lebanon in 1948 with his family during the Arab-Israel war. He later put himself through night school and qualified as an accountant. He worked for the UN for 27 years. Yasser Shahin said on Wednesday it was an inspiring journey made by the family patriarch which the family drew strength from each day.

On the Run, founded in 1999

The On the Run business began in 1999 as the family stepped up expansion into the convenience side of running petrol stations.

The name was shortened to OTR in 2010 and the group stepped on the accelerator, buying Mobil fuel outlets in 2010 and then 25-company-owned BP outlets in 2014. The family always had an eye for a deal. It secured the rights to the Krispy Kreme doughnuts franchise in South Australia in 2013.

Yasser Shahin said it was a significant day also because the OTR brand would be expanded nationwide from its South Australian roots. This was a reversal of the usual theme in the corporate world where national brands are often imposed on South Australia businesses.

“The deal wouldn’t have happened if it was the other way round,” he said.

The Shahin family has also invested $110 million in building a car racing track near Tailem Bend, south of Adelaide, which opened in 2017.

Sam Shahin, who drives a Porsche racing car in national events and competed in a Porsche event as part of the Formula One Grand Prix event in Melbourne last weekend, is a passionate advocate for trying to return a leg of the Formula One GP season to South Australia, to be hosted at the track, known as The Bend.

As part of the transaction, Viva Energy has entered into a 10-year naming rights deal for The Bend racetrack.