Booker Group Plc (BOK), a British food wholesaler, rose to the highest price in seven years after the Competition Commission indicated it won’t have to dispose of assets in its purchase of Metro AG’s U.K. unit.
“The news could not be better, with the Competition Commission provisionally clearing the Makro deal, seemingly without the need to dispose of any of the 30 branches,” Nicola Mallard, an analyst at Investec who recommends buying the stock, wrote in a note today. “Booker can now press ahead and integrate the business.”
The shares rose 7.8 percent to close at 125 pence, the biggest gain since May and the highest price since February 2006 in London trading. More than 6.2 million shares traded, almost triple the daily average over the last three months.
Booker’s purchase of Makro Holding Ltd. from Dusseldorf, Germany-based Metro AG (MEO) won’t lead to a “substantial lessening of competition,” the commission said today in a statement. The group estimates the U.K. “cash-and-carry” wholesale market is worth 11 billion pounds ($16.4 billion) a year, and said it will give a final report on April 24.
Booker bought Makro from its German owner last year in a deal that valued the unit at 139.7 million pounds, in order to increase the variety of food products it wholesales to caterers, retailers and other businesses. The combined company will face competition “in all areas affected by the merger,” the commission said. Booker operates 172 stores, while Makro has 30, the group said.
The purchase was referred to the Competition Commission by the Office of Fair Trading in November and the commission said today it will consider responses to the preliminary findings before its final report next month. Metro received cash and a Booker stake of more than 9 percent in the transaction.
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