View more on these topics

Hermes joins Schroders in criticising Tesco takeover deal

Tesco-Building-700x450.jpg

Hermes chief executive Saker Nusseibeh has joined Schroders in criticising Tesco’s proposed £3.5bn purchase of wholesaler Booker.

Nusseibeh says the deal will hand the companies influence over 8,000 convenience stores.

“My worry is this puts too much pressure on corner stores. Too much power in the hands of any one supplier is never a good thing. In the long term there could be a backlash against [Tesco],” he told The Times.

It follows Schroders’ criticism of the deal last week, which argued acquisitions often destroy shareholder value.

The fund manager, which owns a 4.5 per cent stake in Tesco, wrote a letter to Tesco chairman John Allan last week, signed by equities manager Nick Kirrage and head of stewardship Jessica Ground.

The letter said Tesco is paying more than 23 times Booker’s peak operating profit, which will “make the creation of shareholder value extremely challenging”

Hermes holds no stock in Tesco, but acts as a stewardship consultant for other investment groups and will be meeting with the supermarket giant ahead of a vote on the deal.

Recommended

Tesco-Building-700x450.jpg
1

Tesco hit with £129m fine for overstating profits

Tesco has agreed to pay a £129m fine imposed by the Serious Fraud Office to avoid prosecution for accounting errors committed by its subsidiary Tesco Stores. A statement from the company confirms it has reached a deferred prosecution agreement with the SFO regarding historic accounting practices. Tesco has also agreed with the FCA to a […]

tesco.gif
1

Tesco launches into mortgage broker market

Tesco Bank has made its long-awaited entry into the broker market. Tesco Mortgage Intermediaries is being offered first through London & Country, then through Legal & General’s Nouveau panel in the coming months. It has trackers starting from 1.35 per cent, two-year fixed rates from 1.67 per cent and five-year fixes from 2.34 per cent. […]

Tesco-Building-700x450.jpg

SFO to question ex-Tesco boss over accounting black hole

Former Tesco chief executive Philip Clarke is set to be questioned by the Serious Fraud Office over the company’s £250m accounting black hole. Clarke will be quizzed over how the supermarket group overstated its half-year profit forecast by £250m, which was revealed in October 2014, Bloomberg reports. Clarke left Tesco in July 2014 , handing […]

Oil industry: only the fittest will survive

The actions of OPEC have forced the oil supply to fall and producers to cut costs and rationalise, says Richard Hulf In an interview with journalist Alexis Xydias, Richard Hulf, manager of the Artemis Global Energy Fund, explains the impact of the fall in the oil price on energy companies. Alexis also quizzes Richard on […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment