LONDON (Reuters) - Top-10 Tesco (TSCO.L) shareholder Magellan Financial Group said on Monday it had some concerns about the firm’s 3.7 billion pound takeover of British wholesaler Booker (BOK.L), but was “strongly supportive” of the firm’s management.
Co-founder Hamish Douglass said he was “neutral” about the deal as although the deal terms were fair, he had some concerns about the process of merging both firms, and had voiced his concerns to Tesco.
“We are not concerned about the financial terms of the Booker transaction as we assess them to be fair after taking into account the synergies. Our reservations relate to the potential distractions and increased complexity of integrating the businesses,” Douglass said in emailed comments.
“We are neutral on the transaction but strongly supportive of Dave Lewis and the senior management team at Tesco... In our view Tesco shareholders have a simple decision - are they prepared to back Dave Lewis or not? Magellan is backing Dave Lewis.”
The support comes as fellow top Tesco shareholders Schroders and Artisan Partners both said last week that they did not support the deal, calling it expensive and a distraction from its turnaround plan, and asking for the firm to withdraw its offer.
($1 = 0.7983 pounds)
Reporting by Simon Jessop, editing by Maiya Keidan