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.