February 28, 2018 / 11:47 AM / 6 months ago

UPDATE 2-Tesco and Booker shareholders give blessing to marriage

* 85 pct of Tesco investors back 3.95 bln stg deal

* 83 pct of Booker shareholders support deal

* Deal set to complete on March 5

* Shares in both companies rise (Adds details of Booker meetings, shares)

By James Davey and Alistair Smout

LONDON, Feb 28 (Reuters) - Tesco’s 3.95 billion pound ($5.5 billion) takeover of Booker was overwhelmingly backed by shareholders of both companies on Wednesday, provisional voting figures showed, clearing its final hurdles.

Combining Tesco, Britain’s biggest retailer, with Booker, its largest wholesaler, will create a new powerhouse in the country’s 200 billion pounds grocery market.

The cash and shares deal, valued at 3.7 billion pounds when it was agreed in January last year, is now scheduled to complete on March 5.

Buying Booker marks the boldest move yet by Tesco Chief Executive Dave Lewis, who took over in 2014 shortly before an accounting scandal plunged the group into the worst crisis in its near 100-year history.

At a general meeting of Tesco investors 85 percent of votes cast approved the deal.

At two Booker shareholder meetings - a scheme court meeting and a general meeting - 83 percent of votes cast backed the takeover.

Final voting numbers, which could differ only marginally, will be announced through statements to the stock exchange later on Wednesday.

Tesco’s general meeting required the support of 50 percent of shareholders for the deal to proceed. The threshold was higher at Booker at 75 percent.

For each Booker share, Tesco is offering 0.861 new Tesco shares and 42.6 pence in cash.

Tesco shares were up 2.6 percent at 212.5 pence at 1333 GMT, while Booker’s were up 2.4 percent at 228.8 pence.

“It’s been carried fairly comfortably,” Tesco Chairman John Allan said at the retailer’s meeting in central London, attended by just 65 Tesco shareholders.

Already the dominant player with a 28 percent share of Britain’s retail grocery market, the takeover provides the supermarket group with access to the faster growing “food away from home” segment of the market.

Last year some prominent Tesco investors criticised the deal, saying Lewis was overpaying and that it would distract from the company’s turnaround plan. The late Richard Cousins resigned in protest as Tesco’s senior independent director in January last year.

Conversely, earlier this month Booker shareholders, hedge fund Sandell Asset Management and merger-arbitrage fund Alpine Associates, along with two shareholder advisory groups said Tesco should pay more. ($1 = 0.7240 pounds) (Editing by Kate Holton and Keith Weir)

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