It was an uncomfortable day in the limelight for Tesco, which was hit with a double-whammy of headlines.
First, its takeover of food wholesaler Booker was thrown into doubt after two of its largest shareholders – Schroders and Artisan Partners – slammed the proposed £3.7bn deal.
The shareholders, which own a combined 9% stake in Tesco, urged chairman John Allan to pull the plug on the tie-up.
They argued the merger will be an unwanted distraction for the grocer as it continues its turnaround efforts under chief executive Dave Lewis, and that the price paid for Booker would make creating value for shareholders “extremely challenging”.
Lewis, however, remained defiant, claiming the grocer continues to be “completely committed” to the deal despite the investor rebellion.
Tesco’s chief executive faced other uncomfortable questions from the media after the grocer’s UK subsidiary, Tesco Stores Ltd, agreed to pay a £129m penalty to the Serious Fraud Office but avoid prosecution over its £326m accounting scandal.
The Deferred Prosecution Agreement is not an admission by Tesco that it or its staff committed a criminal offence, nor does it affect the case of three former senior Tesco executives who face a fraud trial in September.
But Lewis believes the settlement will finally allow the retailer to “move on” from the scandal.
Elsewhere today, Card Factory posted flat full-year like-for-likes and a dip in statutory pre-tax profit because of “softer” footfall, and Moss Bros’ pre-tax profits surged 20.7% in the year to January 28.
Quote of the day
“We continue to add to the capabilities of the management team and we are well placed to accelerate our growth, in spite of continuing tough market conditions and the ongoing headwinds which we face as a result of increasing input costs in many areas.”
– Moss Bros chief executive Brian Brick commenting on today’s full-year results
Today in numbers
The number of sides on the new £1 coin that came into circulation today
The number of stores Card Factory currently operates, with a target of 1,200
Along with the Prime Minister’s triggering of Article 50, tomorrow brings interim results from struggling retailer Game.
Emily Hardy, senior reporter