Experienced Investor
Tesco to buy Budgens and Londis owner: what it means for investors
Supermarket giant Tesco today announced an agreed takeover of wholesaler and convenience store owner Booker, in a deal which it values at £3.7bn.
For each share in Booker Tesco is offering 0.86 shares in the new combined group and 42.6p in cash. Based on yesterday’s closing share prices the offer is worth 205.3p per share, which is a relatively modest 12% premium.
As an added incentive Tesco said the deal would enable it to restart dividend payments in 2018. Interested investors should note Booker’s chief executive Charles Wilson will join Tesco’s board as part of the deal.
This deal has come out of the blue for shareholders of both entities and was welcomed by the market, with Tesco’s shares up 10% this morning. The appeal for Tesco is clear as it provides access to the growing trend for eating out through Booker’s wholesale business which supplies many small restaurants and catering groups.
We have changed our recommendation of Booker to a ‘hold’ while the deal is under consideration by its shareholders. Tesco remains a ‘hold’ as fierce price competition and promotions are likely to remain a squeeze on margins for some time.
Ian Forrest is an investment research analyst at The Share Centre
There are 0 Comment(s)
Everything you wanted to know about ISAs…but were afraid to ask
The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...
Your right to a refund if travel is affected by train strikes
There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...
Could you save money with a social broadband tariff?
Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.
What will happen if rates change
How your finances will be impacted by a rise in interest rates.
Regular Savings Calculator
Small regular contributions can build up nicely over time.
Online Savings Calculator
Work out how your online savings can build over time.
DIY investors: 10 common mistakes to avoid
For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.
Mortgage down-valuations: Tips to avoid pulling out of a house sale
Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?
Five tips for surviving a bear market mauling
The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...
Money Tips of the Week
© AE3 Media Ltd, Floor 7, Lincoln House, 296 - 300 High Holborn, London WC1V 7JH, Company.