LONDON, March 28 Tesco, Britain's
biggest retailer, remains committed to its agreed 3.7 billion
pound ($4.7 billion) takeover of wholesaler Booker
despite opposition from some big shareholders, its boss said on
On Monday, Tesco's third and fourth largest investors -
Schroders and Artisan Partners who together hold 9
percent of its equity - called on the supermarket group to
withdraw its offer, saying it was overpaying and the deal was a
distraction to the company's turnaround plan.
"We’re absolutely, completely committed to the deal," Tesco
Chief Executive Dave Lewis told reporters on Tuesday.
“Since we made the announcement (on Jan. 27) I’ve met tens
of shareholders, here and in North America, and I’m really
pleased with the response that we’ve got," he said.
Lewis said support for the deal was borne out by investors
buying Tesco stock over the last two months.
"If you look what the buying has been in our top ten
register you see that a significant majority of our top ten have
increased their holding within Tesco," he said.
He added those investors recognised the growth opportunity
of the deal and projected annual synergies of 200 million pounds
- well ahead of the earnings of Booker in 2016-17.
Lewis also stressed Tesco was still in the early stages of
the timetable for taking over Booker, with the deal still to be
formally considered by competition authorities.
If it crosses that hurdle, the deal will need to be approved
by 50 percent of Tesco shareholders at an investor meeting.
"This has got a long way to run," said the CEO.
Shares in Tesco, down 8.5 percent this year, were down 0.3
percent at 189.4 pence at 1217 GMT, also influenced by news on
Tuesday the firm is to pay 214 million pounds in fines and
compensation for investors to settle a probe over a 2014
Bruno Monteyne, a former senior Tesco executive who is now
an analyst at Bernstein, does not think the Schroders/Artisan
stance reflects majority opinion among Tesco shareholders.
"The element of distraction risk ... will find most
resonance amongst investors but not sufficiently to derail the
deal," he said.
Lewis also rejected criticism that Tesco's engagement with
shareholders over the deal had been inadequate.
He said it was "not at all unusual" for Tesco not to consult
shareholders before proposing the deal.
He said he had spoken to Schroders and Artisan on several
"We offered both of them the opportunity to come and spend
more time in the business and to understand why we felt so
strongly about it.
"One of them took it up and we spent six hours with them,
walking it through, and the other declined to come."
($1 = 0.7957 pounds)
(Reporting by James Davey; Editing by Mark Potter)