Tesco chief executive Dave Lewis has said that the retailer is “absolutely, completely committed” to the deal to acquire wholesaler Booker, after the Financial Times reported that two senior shareholders have spoken out against the acquisition.
The FT alleged that Schroders and Artisan Partners, which together hold 9% of shares, had ‘voiced concerns’ over the £3.7 billion takeover, with the former penning a letter to Tesco chairman John Allan, stating, 'The high price being paid for Booker makes the destruction of value even more likely [than in an average deal].'
The comments fly in the face of Tesco’s position on the deal, with the retailer saying that it is “pleased with the overall response” from its discussions so far with shareholders.
In response to the Schroders letter, Dave Lewis told Bloomberg, “We have done everything we can to share with them why this is such a compelling proposition for Tesco. […] We’re absolutely, completely committed to the deal.”
Commenting on the Booker deal, Bernstein Research said that the “economic rationale for the deal is extremely strong. Two national supply chains whizzing products across the UK is less efficient than one.
“Tesco's buying terms are hugely better than Booker's. Booker customers will be way better off with those lower sourcing costs, better ranges and higher service levels. We haven't seen any credible push back on the potential economic merits.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
