07 Mar 2018

Investec advises Booker on Tesco merger

Investec has acted as joint corporate broker to Booker Group Plc (“Booker”) in relation to its £4bn cash and share merger with Tesco Plc (“Tesco”). The merger will create the UK’s leading
food group.

 

Booker is the UK’s largest wholesaler, supplying food and non-food products and serving approximately 1.2 million customers. Investec has acted for Booker since its re-admission to the stock market in 2007, following a reverse takeover, and provided corporate broking and strategic advice to Booker for this merger.

 

Tesco’s market capitalisation is now just under 20 billion pounds, making it larger than the combined market capitalisation of rivals Sainsbury’s, Morrisons, Marks & Spencer and Ocado.

 

Keith Anderson, Managing Director, Corporate Broking at Investec, commented:

 

“Our long-standing relationship with Booker and deep understanding of the company’s traditional long-only shareholders helped us to ensure a successful outcome.”

 

“This merger brings together the UK’s largest retailer with the UK’s largest wholesaler, adding significant value over the long term: synergies arising from the merger are expected to reach a run rate of at least £200m per annum over the next three years.”

 

Investec has advised on a string of deals in the first quarter of 2018, including a £105m placing for Dechra, a £50m placing for easyHotel and Cineworld’s £2.5bn takeover of Regal Entertainment. Investec is also advising on Melrose’s takeover bid for GKN.