Rivals have been dismayed by the Competition and Markets Authority’s (CMA) decision to approve Tesco’s (LON:TSCO) merger with Booker Group (LON:BOK), The Times has reported. The watchdog gave its unconditional approval to the deal yesterday, having granted the tie-up a provisional approval last month.
Tesco’s share price has jumped in London in today’s session, having added 0.92 percent to 208.04p as of 10:34 GMT. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent higher at 7,547.35 points.
Rivals dismayed by CMA decision
The Times reported this morning that John Mills, managing director of Landmark Wholesale, who had previously warned that the merger would destroy competition and put thousands of jobs at risk, had said yesterday that Palmer & Harvey did not collapse because of the impending Tesco-Booker deal but it was an “indication of what is going on in our market and how thin margins are”.
The newspaper also quoted Steve Parfett, chairman of AG Parfett, as saying that the regulator had “completely misunderstood” the case against the takeover. He added that he was talking to colleagues in the industry about the prospect of a challenge.
The CMA ruled yesterday that Tesco’s purchase of Booker does not raise competition concerns, noting that it had “carefully listened to feedback from retailers and wholesalers”.
Shareholders expected to okay tie-up
The tie-up, however, still needs to gain shareholder approvals, with respective investor meetings anticipated towards the end of February. The Times notes that although a couple of big Tesco investors oppose the merger, a survey by Bernstein, the research group, indicates that the blue-chip supermarket’s shareholders will approve the deal comfortably above the 50 percent threshold. The response from Booker shareholders, where the threshold is 75 percent, however, could be less straightforward.