British supermarket chain Sainsbury's is developing plans for a takeover of Palmer & Harvey (P&H), a UK tobacco distributor and a major supplier to Tesco, according to the Daily Telegraph.
The news outlet reports that the plans for the bid are still at an early stage. A source told the paper that discussions between Sainsbury's and P&H have been confirmed, but no formal approach has been made.
Competition
The paper notes that P&H has been in a state of concern over the last few months following the news of Tesco’s planned £3.7 billion takeover of Booker. The Telegraph reports that around 40% of P&H’s revenues are directly linked to dealings with Tesco.
Tesco’s deal with Booker represents a potential dent in P&H’s revenue - which recently signed a new three-year contract with Tesco. The deal allows P&H to distribute tobacco and postage stamps across its UK market.
The Telegraph reports that Sainsbury's could position itself as a competitor to the Tesco/Booker deal, granted it is successful in its P&H acquisition, as it recently agreed a £1.4 billion takeover of high street store Argos.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O’Sullivan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
