Tesco Share Discussion Threads

[smartypants] 01/2/2017 11:49

Forget the chatter.. the plans of mergers.. bumper Christmas trading..
All TSCO wants to do is continue down the (artificial) slippery slide it started out down at the end of last/start of this year.... nothing else matters

[loganair] 01/2/2017 11:00

Retail market expert form the M&A advisory firm, Livingstone, Harsha Wickremasinghe, takes a look at Tesco's £3.7bn acquisition of Booker:

Last week's announcement that the UK’s largest supermarket retailer is merging with food wholesaler Booker, valuing the latter at £3.7 billion, is one that has caught us (and presumably everybody else) with genuine surprise. Has Tesco just pulled off the most audacious deal we have seen for a long time? We analyse some of the key areas of this transaction which we believe have cause for the most excitement.

The deal will create the UK’s largest food business serving both the in-home (via supermarkets / c-stores) and out-of-home (mainly via Booker’s cash & carry and delivered foodservice operations) segments – a combined market size of almost £200 billion.

At a glance:

We believe Tesco will be the biggest beneficiary of this merger, becoming the undisputed leader in the convenience retail sector:

8,300+ stores (across the Tesco Express, One Stop, Premier, Londis, Budgens and Family Shopper fascias) A convenience market share in excess of 28%, greater than the combined market share of the next two retailers – M&S Simply Food and The Co-op.

On the cusp of shifting consumer trends:

Securing such a deal at a time when consumer shopping habits continue to evolve away from larger, weekly shops towards more frequent, top-up shops at local stores (and online), is a strong move that should cement Tesco’s dominance in small format grocery retailing. Playing on the theme of convenience, Tesco could now have around 5,000 more local click-and-collect points for its products – penetrating even deeper into residential communities where the smaller Premier or Londis stores are typically located – further strengthening its omnichannel proposition.

Greater purchasing power:

The enlarged scale of the combined group also offers greater scope to negotiate better purchasing terms for products, particularly important at a time of rapidly rising input prices across the sector. This should help Tesco/Booker to become even more price competitive for their customers across both the core retail and foodservice channels. Tesco will be able to increase price pressure on its closest multiple rivals, whilst helping to mitigate the ongoing impact from the rapidly advancing discounters.

Tesco will now have a significant presence in the delivered foodservice sector – a first for a UK multiple. The potential benefits are likely to be felt greatest for the majority of catering customers and small businesses – who form the bulk of Booker’s customer base in this channel. Several potential initiatives such as lower prices, more extensive ranges and further private label development, alongside a more comprehensive delivery infrastructure, are just some of the perceived benefits these customers could enjoy. Booker’s Chef Direct business also has over £100 million sales to nationwide chains such as Byron, Wagamama and Carluccio’s – providing Tesco with an indirect presence in the buoyant casual dining market, just over six months since it sold its Giraffe restaurant chain.

Potential benefits throughout the value-chain:

There are also several other potential back-end enhancements that could be realised, the first being digital. Booker almost doubled its online sales (to £979 million) between 2011 and 2016, and we expect it to benefit significantly from Tesco’s considerable expertise in this area. Further efficiencies and enhancements to the online ordering process should enable Booker to step up its game against larger rivals Brakes and 3663. Potential integration of elements of Tesco’s banking and mobile operations (e.g. Its PayQwiq digital payment wallet) into Booker’s online platform offers an exciting range of possibilities.

A tricky road ahead:

For all the excitement surrounding the deal, it will not be an easy ride from here on. The biggest stumbling block is the Competition & Markets Authority (CMA) which is undoubtedly salivating and plotting, as we write this, how they can steamroller this deal in the sake of consumers’ interests. We also expect a significant vocal outburst from independent retailers and the broader wholesale sector regarding the possible impact to their businesses as a result of this deal. The objections will be strong; the investigations searching; and the battle to get this deal over the line could be brutal for everyone involved.

Outsmarting the competition, or peaking too early?

Regardless, the rationale behind this deal is compelling: Tesco wants to remain true to its core as a food retailer, but in light of the structural changes facing the sector (the shift to convenience and the ongoing, and faster, growth in the eating out market) it wants a slice of the broader pie to secure its long-term strategy. Tesco still has much to do in its core business – its turnaround plan is still not complete – so the jury is out as to whether the timing of the deal is right. However, if it pulls it off, this could be the trump card that flummoxes its rivals and makes Tesco back in to the unassailable force it once was.

[diku] 01/2/2017 10:59

porty will you be the one with dark glasses & a thick moustache?...I can see a picture coming!..

[wilksey1] 01/2/2017 10:18

pink sombrero and fish net tights only looking my best for mr lewis

[diku] 01/2/2017 10:11

porty...what will you be wearing so I can recognise you?...

[portside1] 01/2/2017 10:10

see you all at the meeting . end for now I have my questions ready

[portside1] 01/2/2017 10:06

Tesco employees not allowed to post . were is lake on this great deal for holders
it will take 12 years at best to get back the 3.7b its not a good deal but good for directors crooks and liars

lewis is a silent cancer

the agm will be hostile and the ceo will walk off the platform on questions

[pal44] 01/2/2017 09:48

Why is this held back everywhere it blue today?

[portside1] 01/2/2017 08:44

if they go to 185p will buy 100.0000 just for you cc

[portside1] 01/2/2017 08:43

cc I am not to bothered as I have very deep pockets and could buy 200000 money is not a problem 69 and nothing else to do . have now decided no more eu travel will only go to florida to friends and it is free

[portside1] 01/2/2017 08:31

merger details none clarity none
its a bad deal for holders but very good for the crooks running tesco

[portside1] 01/2/2017 08:29

notice lake is not posting on the fall

[chris coxon] 31/1/2017 16:21

203 ave--ouch!!!!!

[portside1] 31/1/2017 10:14

when I see the rewards I will ask the police for an inquire into the rewards by friends to friends for failure .

share holders being stuffed

[smartypants] 31/1/2017 10:04

Is that an aggressive green slime I see moving its hips to the beat and sliding down the chart??
Oh..wait....no
It just a dominant algae rhythm

[portside1] 31/1/2017 09:55

did directors family members buy shares in booker before news

[portside1] 31/1/2017 09:49

sp falls on bad news share price goes up on good news,

the only winners are the crooks at Tesco .

lewis silent on the fall so he will get thousands of more free shares .

[portside1] 31/1/2017 09:47

will wait for the rewards to see if I should contact the police on fraud .

you can not reward for failure and failure we have ,

[portside1] 31/1/2017 09:45

fund selling out . great deal for directors bad news for investors .

lewis the silent cancer

[anony mous] 31/1/2017 09:35

A very good deal as LAZYSIDE and his gang said.Lol.

[diku] 31/1/2017 09:31

My stance is that they should ban this free share options across the Plc casino markets....just a salary with expenses (fixed) & bonus on performance only...cut out all the nonsense on free share options...if you give freee shares to insiders then why not give it to all shareholders!!....

[portside1] 31/1/2017 09:26

diku the sfo should investigate the rewards given out by their friends in the remuneration department . giving out millions for failure

[portside1] 31/1/2017 09:25

what a great deal for the crooks at Tesco . lewis and co to be rewarded with loads of free shares to cover the fall in the share price so that they do not lose

[diku] 31/1/2017 09:24

porty...as I have said before when trading is desperate that is the time to do a deal to muddy the figures...