Trouble in store for Booker deal?

TESCO has been hit with a late bid to block its £3.7billion takeover of cash and carry giant Booker.

ISS, a top shareholder adviser, is recommending Booker’s investors vote against the mega deal at a meeting in two weeks’ time.

It issued two notes yesterday, one advising Tesco’s shareholders to approve the takeover and the other urging Booker’s owners to block it.

Booker investors should get a higher price from the shares element of the deal and have “limited potential” to benefit from planned cost savings, it said. Tesco “appears to be getting the better deal under current terms,” it added.

ISS (Institutional Shareholder Services), advises investors involved in more than 8.5 million votes a year covering 3.8 trillion shares.

It comes after Sandell, a US hedge fund which owns 1.75% of Booker, recently said it was opposed to the deal. Yesterday’s development suggests Tesco chief executive Dave Lewis won’t have it all his own way ahead of the vote on February 28.

For the deal to be approved, 75% of Booker shareholders must support it.

The boards of both Tesco and Booker agreed the merger in January last year. The Competition and Markets Authority cleared it in December.

Budget supermarket Lidl opened five stores in one day yesterday in Stockton, Edinburgh, Polegate in East Sussex, Hull and Rosehill, South London. Nineteen stores have opened so far this year, creating 700 jobs and pushing up its UK shop total to 700.