Tesco share price: Competition watchdog delays findings on Booker deal

Provisional findings now expected by mid-November at the latest

Tesco share price: Competition watchdog delays findings on Booker deal

The Competition and Markets Authority (CMA) has pushed back the publication of its provisional findings on Tesco’s (LON:TSCO) merger with wholesaler Booker (LON:BOK), the competition watchdog has disclosed. The statutory deadline for the decision on the deal is December 26.

Tesco’s share price has fallen deep into the red in today’s session, having given up 1.79 percent to 178.15p as of 13:48 BST, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.11 percent higher at 7,501.23 points. The group’s shares have lost more than 16 percent of their value over the past year, and are down by some 13 percent in the year-to-date.

CMA delays provisional findings

The CMA said today that its provisional findings on Tesco’s merger with Booker were now due early/mid November. The findings of the five-month long investigation were previously expected by the end of October. The statutory deadline for the end of the watchdog’s in-depth ‘Phase 2’ investigation stands at December 26, with the CMA’s final report to be published mid/late December.

The watchdog could potentially recommend that disposals might be needed to alleviate competition concerns, with analysts expecting that the sell-off of Tesco’s One Stop chain or hundreds of its Express stores could be required.

The CMA referred the deal to an in-depth investigation in July after the blue-chip grocer asked the watchdog to fast-track the process.

Ratings update

In analyst news, Shore Capital reiterated its ‘hold’ rating on Tesco today, without specifying a price target on the stock, while Credit Suisse, which sees the grocer as an ‘underperform,’ boosted its valuation on the shares from 160p to 165p yesterday. According to MarketBeat, Britain’s biggest grocer currently has a consensus ‘hold’ rating and an average price target of 194.13p. 

As of 14:20 GMT, Wednesday, 01 November, Tesco PLC share price is 178.60p.

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