Tesco share price: Advisory group tells Booker investors to oppose tie-up

Glass Lewis argues bid ‘clearly lags regional trends’

Tesco share price: Advisory group tells Booker investors to oppose tie-up

Tesco’s (LON:TSCO) plans to acquire Booker Group (LON:BOK) are facing mounting opposition with advisory body Glass Lewis telling shareholders in the wholesaler to oppose the deal. The move came after Institutional Shareholder Services argued last week that the deal was skewed towards Tesco shareholders at its current level.

Tesco’s share price has been little changed in London this morning, having inched 0.1 percent higher to 206.70p as of 09:42 GMT. The group’s shares are marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.11 percent lower at 7,238.55 points. Booker’s share price meanwhile is 0.09 percent up at 225.90p, as compared with a 0.5-percent dip in the mid-cap FTSE 250 index.

Glass Lewis opposes deal

The Times reported this morning that shareholder advisory group Glass Lewis had told investors in Booker to vote against Tesco’s planned takeover of the company, arguing that the premium offered by the blue-chip supermarket ‘clearly lags regional trends’.

“We see little cause for Booker investors to support what appears to be a less-than-compelling control transaction,” the advisory body pointed out.

Opposition from Glass Lewis and ISS comes less than ten days before a shareholder vote on the deal. Sandell Asset Management, which holds a stake in Booker, has also signalled that it is planning to oppose the tie-up unless the wholesaler secures a better deal.

Analysts on Tesco

The 14 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 219.50p on the shares, with a high estimate of 270.00p and a low estimate of 170.00p. As of February 17, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.  

As of 09:59 GMT, Wednesday, 21 February, Tesco PLC share price is 206.60p.

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