Sign up Australia
Proactive Investors - Run By Investors For Investors

Booker says Tesco takeover competition review is progressing as it reports quarterly sales growth

Booker's like-for-like sales in the 12 weeks to 8 September rose 1.3%, boosted by a strong performance in catering and retail supply.
Group sales, including the Budgens and Londis stores, rose 1.1% in the second quarter

UK wholesaler Booker Group PLC (LON:BOK) said the competition watchdog’s review of its £3.7bn takeover by Tesco PLC (LON:TSCO) is “progressing” as it reported growth in second quarter sales.

Like-for-like sales in the 12 weeks to 8 September rose 1.3%, boosted by a strong performance in catering and retail supply.

Non- tobacco sales increased 6% on a like-for-like basis while tobacco sales dropped 9.4%, reflecting the negative impact of changes in tobacco legislation.

Group sales, including its Budgens and Londis stores, edged up 1.1%.

“Our plans to focus, drive and broaden Booker Group are on track,” said chief executive Charles Wilson.

“We continue to help our retail, catering and small business customers prosper through improving our choice, prices and service."

READ: Booker shares gain after reporting first quarter sales growth amid Tesco takeover probe

Booker said the Competition and Markets Authority (CMA) is continuing to review its planned merger with Tesco and will not be making forward looking statements for the duration of the offer period as required in the Takeover Code.

READ: Tesco's proposed Booker takeover to undergo in-depth competition investigation

The CMA referred Tesco’s bid for Booker for an in-depth investigation in July to assess whether the deal could reduce chose for shoppers and for Booker’s small stores. 

Shares climbed 0.85% to 199.80p in morning trading. 

Shore Capital cautious on Booker as CMA reviews Tesco deal 

Shore Capital left its rating on Booker at 'sell' with a 198p target price, highlighting concerns about the CMA rejecting its planned Tesco merger. 

"We see limited near-term upside for Booker shareholders from the Tesco tie-up, it is very much a medium to long term proposition," according to Shore Capital analysts Clive Black and Darren Shirley.

"The outcome is also much more about what Tesco can deliver since Booker in itself does not transform Tesco group’s prospects; current financial outcomes from a high priced deal are not yet compelling, maybe this will change? As such if the CMA were to put the kybosh on the proposed merger, we see considerable downside for Booker and hence our cautious stance."

View full BOK profile View Profile

Booker Group Timeline

Related Articles

April 10 2018
The goal is to have 70 stores by the end of 2018 and 100 by 2020

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use