Supermarket chain Tesco (TSCO) has been busy of late, and we don't mean busy getting the business back up and running as part of its long-term recovery plan. Instead, the grocer has settled its 2014 accounting scandal with both the Serious Fraud Office (SFO) and Financial Conduct Authority (FCA) by agreeing to a fine and a new compensation scheme - oh, and it made a £3.7bn takeover offer for wholesale business Booker (BOK).
The proposed deal, which would give the grocer significant pricing power across the whole of its supply chain has not exactly proved popular with the market so far. We pointed out how it may not offer the best value for Booker shareholders at the time, and now there are widespread fears about the competition implications for the sector. Other City institutions, including Tesco's own shareholders Schroders and Artisan Partners have expressed their concern that the deal will distract management from focusing on the real issue at hand - rebuilding the group's margins and improving profitability for the long-term.
Of course, shareholders will hope that these issues are addressed in more detail when the company reports annual results next week.
