Tesco defend £3.7bn bid to takeover wholesaler Booker

The UK’s biggest retailer has come under fire from Schroders and Artisan Partners, who together own about 9 per cent of the company and believe the deal for Booker is too expensive and is a distraction from Tesco’s turnaround under chief executive, Dave Lewis. 

But Lewis said he had taken soundings from many supportive shareholders and insisted Tesco remains “absolutely, completely committed to the deal”, which would create Britain’s biggest wholesale and retail food business. 

He said: “Since we made the announcement, I’ve met tens of shareholders, here and in North America, and I’m really pleased with the response that we’ve got. If you look what the buying has been in our top 10 register, you see that a significant majority have increased their holding within Tesco.” 

Shore Capital analyst Clive Black said Lewis had worked “corporate wonders” in keeping Tesco stable after the company admitted overstating its profits by £326million. 

Tesco will pay a £129million fine to avoid prosecution by the Serious Fraud Office over false accounting by its subsidiary, Tesco Stores Ltd, between February and September 2014. 

The retailer has also agreed with the Financial Conduct Authority to pay about £85million in compensation to investors who bought Tesco shares and bonds between August 29 and September 19 that year. 

Its total charge, including costs, amounts to £235million. 

The FCA has stated that it is not suggesting the Tesco board of directors know, or cold reasonably be expected to have known, that the information contained in the retailer’s trading statement on August 29, 2014 was false or misleading. 

Lewis said: “Over the last two-and-a-half years, we have fully co-operated with this investigation into historic accounting practices, while at the same time fundamentally transforming our business. 

“We sincerely regret the issues which occurred in 2014 and we are committed to doing everything we can to continue to restore trust in our business and brand.” 

Tesco shares closed up 1¼p to 191¼p.