TSCO.L - Tesco PLC

LSE - LSE Delayed Price. Currency in GBp
234.50
-3.00 (-1.26%)
At close: 4:48PM BST
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Previous Close237.50
Open236.10
Bid234.60 x 0
Ask234.70 x 0
Day's Range233.20 - 237.98
52 Week Range187.05 - 254.10
Volume18,641,500
Avg. Volume25,464,162
Market Cap22.966B
Beta (3Y Monthly)1.27
PE Ratio (TTM)17.24
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield0.06 (2.46%)
Ex-Dividend Date2019-05-16
1y Target EstN/A
  • Reuters

    UPDATE 3-Aldi focused on British sales with $1.25 bln growth plan

    German discount supermarket group Aldi plans to pump 1 billion pounds ($1.25 billion) into Britain, chasing market share at the expense of profit, which dropped by 26% last year as it pursued sales growth, store openings and new customers. Britain's fifth biggest supermarket, which is privately owned by Germany's Aldi Sud, signalled no let-up for its larger rivals as it reaffirmed a commitment to investing in the UK, despite a low price pledge denting its 2018 profit. Aldi UK, which trades from about 840 stores and has a grocery market share of 8.1%, said sales increased 11% in 2018 and it gained 800,000 new customers.

  • Reuters

    RPT-Stockpiles of tomatoes? UK retailers bristle at demands of no-deal Brexit

    A British demand for supermarkets to prepare for a potentially chaotic no-deal Brexit by stockpiling food is stoking anger in the industry, with bosses saying they should not be blamed if people can't find everything they want on the shelves. With British politics spiralling towards an unpredictable endgame, makers of food and drugs are having to restructure operations in case the arrival of customs checks shatters supply chains, clogs ports and delays deliveries. The food industry has warned that their stockpiling can only go so far, and executives have expressed incredulity at Michael Gove, the minister in charge of no-deal Brexit planning, who vowed this month that there would be no shortages of fresh food if Britain leaves the European Union (EU) without agreement on Oct. 31.

  • Study: Big food brands may be falling short on lofty climate goals
    Yahoo Finance

    Study: Big food brands may be falling short on lofty climate goals

    Brands McDonalds (MCD), Nestlé (NESN.SW), and Walmart (WMT) are championing climate action, but a network of investors said the big brand suppliers aren’t aligned with their messaging.

  • VMWare (VMW) Just “Struck Oil” – Here’s How to Invest
    InvestorPlace

    VMWare (VMW) Just “Struck Oil” – Here’s How to Invest

    VMWare's (NYSE:VMW) meteoric rise after inking a key partnership a couple years ago just goes to show: "Data is the new oil."That phrase was first coined in 2006 by a British statistician named Clive Humby. He should know; he created the first supermarket loyalty card on behalf of Tesco (OTCMKTS:TSCDY). And with the data gleaned from that "Clubcard" program, the U.K. grocery chain doubled its market share from 1994 to 1995 alone. Talk about a valuable commodity!These days, companies like VMWare are crucial in keeping this gravy train going. And VMW stock is up roughly 70% for us at Growth Investor.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe "VM" in "VMWare" stands for virtual machines, which is software that solves a big problem for many businesses: too many servers.The more your company grows, the more data storage you need, but multiple servers quickly become a major headache - and costly. Instead, you can just log into VMWare, and do all your computing on one server. Things run faster and more efficiently, with less confusion. No wonder VMWare grew both earnings and revenue (+12% year-over-year) in the second quarter, both of which beat Wall Street expectations. * 7 Stocks to Buy In a Flat Market Now, these days, many companies don't keep their own servers, or even rent space in a data center…they just use cloud (online) storage. Or they use some combination of the three. And when it comes to this "hybrid cloud," VMWare has pretty much cornered the market.That's thanks to a historic partnership with one of my other Growth Investor picks: Amazon (NASDAQ:AMZN). You might think of Amazon more for online shopping, or to buy e-books for your Kindle. Well, these days, its biggest profit driver is actually Amazon Web Services (AWS).VMWare was already a leader in the cloud computing field; it is the infrastructure platform choice of 100% of the Fortune 500\. It also has strong marketing relationships with computer hardware vendors, like Dell Technologies (NYSE:DELL), HP Inc. (NYSE:HPQ) and IBM (NYSE:IBM). Now that this "private cloud" company has partnered with Amazon's "public cloud" service, customers don't need to choose.Below you can see VMWare's products for your data center and for VMWare Cloud, plus Amazon's own cloud services - and how they can all interact. For Big Data, VMWare and AWS is a "one-stop shop."Source: VMWare.comHospitals, banks, car companies, the Make-a-Wish foundation, even candy companies and colleges all use VMWare to make their data operations more modern (and thus more secure).There's just one final frontier for VMWare and AWS (and their customers): the "mother of all technologies." Crunching the NumbersUp until now, technologies have certainly made our lives easier and more efficient…but with a lot of room for human error. People trip over cords, spill their coffee, and get tired.Artificial intelligence (A.I.) does not.As scientists find even more applications for artificial intelligence - from healthcare to retail to self-driving cars - it's incredible to imagine how much data will be involved.To create A.I. programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every A.I. system.So any one company that can help with customers' data issues - is the one company that's most worth investing in.After all, in the 2003 oil boom, investors could either speculate on oil futures contracts… or they could have bought shares in Core Laboratories (NYSE:CLB).Core did no drilling or exploration of its own. It provided technology to lots of companies who did. And as oil prices climbed from $30 per barrel in 2003 to $100 per barrel in 2008, Core's customers had more money to spend on exploration. Along with that, CLB stock rose 1,100%…with less risk.Now, picture an industry like Big Oil as a huge skyscraper with lots of offices. By buying stock in an individual oil company, it's like having a key to one of those offices. By buying Core Laboratories, it's like having a "Master Key" to all of them. The A.I. "Master Key"Core Laboratories was the Master Key to the 2000s oil boom. And here, the Master Key is the company that makes the "brain" that all A.I. software needs to function, spot patterns, and interpret data.It's known as the "Volta Chip." Last week, VMWare just signed a big deal with this very company -- and its Volta Chip is what makes the A.I. revolution possible.Some of the biggest players in elite investing circles have large stakes in the A.I. Master Key: * Ron Baron, billionaire money manager with one of the biggest estates in the Hamptons. * Ken Fisher, author of The Ten Roads to Riches and other bestsellers, who's made the Forbes 400 Richest Americans list. * Mario Gabelli, namesake of the Gabelli Funds, with a salary of $85 million for one year -- Wall Street's highest paid CEO.None of them, however, are programmers…or any kind of tech guru. You don't need to be an A.I. expert to take part. I'll tell you everything you need to know, as well as my buy recommendation, in my special report for Growth Investor, The A.I. Master Key. The stock is still under my buy limit price -- so you'll want to sign up now; that way, you can get in while you can still do so cheaply.Click here for a free briefing on this groundbreaking innovation.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system -- with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post VMWare (VMW) Just "Struck Oil" - Here's How to Invest appeared first on InvestorPlace.

  • A Plastic-Free Future Starts With Your Groceries
    Bloomberg

    A Plastic-Free Future Starts With Your Groceries

    (Bloomberg Opinion) -- At a Waitrose grocery store in Oxford, England, shoppers are scooping up frozen fruit from dispensers like pick and mix candy. They are filling old plastic takeaway containers with everything from muesli to risotto rice. Welcome to Unpacked, the new store concept from Waitrose, which has freed more than 200 items from their packaging.Environmental campaigners like Greenpeace have been demanding British supermarkets reduce their plastic footprint. But it’s trickier to strip wrappings from food than other products, such as toys, because it can go off. The packaging conundrum facing grocers only compounds another problem they’re grappling with: food waste.But they are making strides to be green, from eliminating hard-to-recycle materials, such as PVC, to enabling customers to remove and recycle wrappings before products leave the store. Some are even offering reverse vending machines to recycle plastic bottles. Tesco Plc said recently that it could no longer stock items if they had too much packaging and is working with suppliers to help them find ways to use less.It’s easier to design plastic-free packaging for products sold at room temperature. As well as dry goods, consumers can easily refill containers for household and personal care items like cleaning supplies or shampoo. Fresh food is much trickier. Meat, for example, will not last long if it isn’t wrapped to protect it from the air. Fresh fruit and vegetables are another challenge because they can be damaged during transport. Even so, Unpacked sells 160 types of loose fruit and vegetables. Seasonality presents another problem. For example, Wm Morrison Supermarkets Plc sources cucumbers from the U.K. in the summer. With the shorter supply chain, they don’t need any packaging. In cooler months, they come from Spain, so they need a thin recyclable film; Morrison makes it clear to customers that the cucumbers have their winter jackets on.One way to extend shelf lives without plastic is to grow products even nearer to the end customer. Vertical farming, which uses stacked trays under LED lights to grow different kinds of food indoors, is one option. Ocado Group Plc, the online supermarket, recently made two investments in this space, including buying 58% of Jones Food Co., Europe’s largest operating vertical farm, based in Scunthorpe, England.Jones primarily grows herbs, packing them in biodegradable and compostable materials within air that has had some of the elements removed. This tricks the plants into thinking that they haven’t been harvested, keeping them fresher for longer.Vertical farms could be built next to supermarkets or online grocery distribution centers to shorten supply chains, reduce packaging and cut down on transportation and refrigeration.Supermarkets are finding other products more difficult to make environmentally friendly. Surprisingly, one is ready meals. They contain liquids and must be kept fresh, while their packaging needs to be able to withstand cooking in both an oven and a microwave.Waitrose has spent more than five years developing a fiber-based packaging that is compostable. It has also introduced trays made from recycled plastic. These come in different colors, depending on the material they’re made from, and don’t have the uniform look that customers are used to.Indeed, while supermarkets must change their behavior to be more sustainable, so must shoppers: For example, a cucumber wrapped in plastic will last about 14 days. One without keeps for about half that time.Morrison has introduced reusable paper carrier bags, but recently began trialing plastic alternatives costing 30 pence each — a higher price than usually charged — prompting complaints from some customers.Waitrose has made sure it’s possible to do a full shop at its 25,000 square foot Unpacked store to help customers be more sustainable without disrupting their everyday lives. So far it’s working: Products without packaging are outselling those that still have it. Some 50% of customers using the refill stations for dry goods are bringing their own containers on a regular basis. All of the U.K. supermarkets are coming under pressure to be more sustainable. So far, 1.4 million people have signed Greenpeace’s petition calling on them to to ditch throwaway plastic packaging. They have more work to do. But so do Britain’s consumers.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Stephanie Baker at stebaker@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Don’t Discount Costco’s Chances in China
    Bloomberg

    Don’t Discount Costco’s Chances in China

    (Bloomberg Opinion) -- China has been a graveyard for many foreign retailers, which frequently arrived with grand hopes only to pull back after years of debilitating struggle. Carrefour SA sold 80% of its operations in June after more than two decades in the country, Tesco Plc folded its business into a joint venture in 2013, and Metro AG is seeking a buyer for its Chinese unit. Costco Wholesale Corp. has more reason than most to believe it can buck the trend.It’s an inauspicious time to enter the world’s second-largest economy. Growth has slowed, and the trade war has made the environment less hospitable for overseas companies. China’s plan to set up a corporate social credit system will raise compliance costs and could put some firms out of business, the European Union Chamber of Commerce in China said Wednesday. At the same time, online shopping is increasingly taking market share from bricks-and-mortar retailers. None of that stopped Costco’s first Chinese outlet, in Shanghai, from being mobbed on its opening Tuesday.It’s probably not a flash in the pan, opening-day discounts notwithstanding. China’s consumer markets are fickle and retail is viciously competitive, with razor-thin margins. Still, Costco looks to have picked its niche carefully. The Shanghai outlet is in a suburban district, aiming to cater to car-driving shoppers willing to load up with bulk items such as 30-pack boxes of cookies or 200-fluid-ounce (6-liter) bottles of detergent. Selling in quantity helps enable the discounts that underpin Costco’s appeal.Such a model wouldn’t work in the more built-up central areas of Shanghai, where most people live in cramped apartments and take public transport. That needn’t matter to Costco, though, as long as the U.S. retailer can find enough suitable suburban markets. Costco’s outlet in Shanghai’s Minhang district has parking space for 1,200 cars, more than any other of its locations.Membership is a key element of Costco’s pitch to consumers. Being part of a fee-paying club adds an aura of exclusivity that may play well with Chinese shoppers, particularly when the Shanghai store offers high-end products such as Maine lobsters, bluefin tuna and Birkin bags. Costco was charging an introductory membership fee of 199 yuan ($28) at Tuesday’s opening, which will rise to 299 yuan.Costco has already shown that it can export its warehouse model, building successful operations in Japan, Taiwan and South Korea. Revenue from international operations more than tripled in the past 10 years.Sam’s Club, a warehouse membership chain owned by Walmart Inc. that’s been in China for more than 20 years, gives cause for optimism on Costco’s entry. Sam’s Club has pushed upmarket by adding services such private dental clinics (for a higher membership fee) and aims to increase outlets in the country to 40 in 2020, from 23 at the start of this year, company executives told the China Daily in January. Chinese consumers have become increasingly willing to pay for better services in the past one to two years, Chen Zhiyu, senior vice president of Sam's Club China, was cited as saying.Costco positions itself as a higher-end shopping destination than Sam’s Club, and has built a reputation for quality fresh food. That may be the company’s best bulwark against the encroachment of internet operators. Venture capital money has been pouring into online grocers, as my colleague Shuli Ren observed last month. Even so, most shoppers in China still like to touch or at least see their vegetables with their own eyes. Sam's Club drove a 4.7% surge in Walmart’s China sales in its most recent quarter, thanks largely to fresh-food sales.Costco has had a five-year online partnership with Alibaba Group Holding Ltd. in China to market its flagship private label Kirkland. That’s helped to build the company’s name in China ahead of its entry to physical retail. A strategy that integrates the two may be critical to flourish in China’s demanding retail landscape. “In many parts of China, same-day delivery really means same-hour delivery,” as Walmart observed in its 2019 annual report. The Sam’s Club owner has a partnership with Chinese e-commerce giant JD.com Inc.Shares of Costco rose 5% on Tuesday, the most since March. That may overstate the potential from a Chinese expansion that’s likely to be modest and incremental, at least at first. But if Costco can thrive in China’s current conditions, it should be there to stay. To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Billionaire Shopper Is Happy to Wait in Line
    Bloomberg

    Billionaire Shopper Is Happy to Wait in Line

    (Bloomberg Opinion) -- Olaf Koch, chief executive of the German food wholesaler Metro AG, looks to have seen off a 5.8 billion euro ($6.5 billion) takeover attempt by the Czech billionaire Daniel Kretinsky. That’s both a blessing and a curse.On Monday, the bidding vehicle for Kretinsky and his business partner Patrik Tkac, said it had failed to convince two of the cash-and-carry group’s founding shareholders to back its 16 euro per share offer.With the holdouts (the Meridian Foundation and the Otto Beisheim Foundation) owning more than 20% of Metro’s shares, Kretinsky’s EP Global Commerce is unlikely to reach the 67.5% threshold for the transaction to succeed. The bidder said it won’t raise its price nor lower the minimum acceptance threshold. So the offer, due to expire on Wednesday, will probably lapse. Shares in the target company fell by about 6% to just above 14 euros on Tuesday morning.While Metro hasn’t responded to the Kretinsky vehicle’s statement, it no doubt welcomes the likely vanquishing of its predator. The grocer had argued that EP Global’s offer undervalued the group and that it had better prospects on its own.This is no unalloyed victory, though. Metro must now deliver on its promises. The company has struggled to improve its poor performance after a profit warning in April 2018, which was driven by problems in its Russia business, and a subsequent cut to its earnings outlook. While there was some improvement in its fiscal third quarter, helped by faster-growing markets such as supplying hotels and restaurants, it has a long way to go. There’s one bright spot: The company is in talks to dispose of its Real hypermarkets unit and is trying to sell a stake in its China operations. These deals could deliver proceeds of more than 1 billion euros.Even so, it’s hard to see why the group’s prospects will be much different from here on. Booker, the British wholesaler that is now part of Tesco Plc, was able to rejuvenate Metro’s British arm after it acquired the unit in 2012. But the German company hasn’t managed to do the same with its own businesses.If things don’t improve significantly in the next year, then Koch will be under severe pressure after seeing off the bid. What’s more, Kretinsky will still have a 17.5% stake in Metro and could agitate for change. That’s not a comfortable position for any chief executive.As we’ve noted before, the bidder is in a decent position whatever the outcome. If Koch does finally turn around Metro, Kretinsky would benefit as a big shareholder. If not, he can return with another bid. Should Metro continue to struggle, his hand may actually be strengthened.(This column was updated to clarify Metro's 2018 profit warning and earnings outlook cut.)To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Tesco to cut 4,500 jobs, reducing opening hours
    MarketWatch

    Tesco to cut 4,500 jobs, reducing opening hours

    The British supermarket giant on Monday announced plans to cut jobs and scale back operations at its smaller convenience stores, citing increased cost pressures.

  • Tesco to cut 4,500 jobs in Metro restructuring
    Reuters

    Tesco to cut 4,500 jobs in Metro restructuring

    British supermarket chain Tesco is cutting about 4,500 jobs from its Metro stores to improve the efficiency of a format that is increasingly used by customers daily rather than for a traditional weekly shop. Tesco, both the biggest retailer and largest private sector employer in Britain, is restructuring operations in response to changing consumer habits, driven by the rise of online shopping and increased competition from discounters Aldi and Lidl. The company said the changes in its 153 Metro stores - medium-sized shops found on Britain's shopping street and by railway stations - would allow it to shift stock more quickly to the shelves and cut the time it was held in the store room.

  • Reuters

    UPDATE 2-Tesco to cut 4,500 jobs in Metro restructuring

    British supermarket chain Tesco is cutting about 4,500 jobs from its Metro stores to improve the efficiency of a format that is increasingly used by customers daily rather than for a traditional weekly shop. Tesco, both the biggest retailer and largest private sector employer in Britain, is restructuring operations in response to changing consumer habits, driven by the rise of online shopping and increased competition from discounters Aldi and Lidl. The company said the changes in its 153 Metro stores - medium-sized shops found on Britain's shopping street and by railway stations - would allow it to shift stock more quickly to the shelves and cut the time it was held in the store room.

  • Does Tesco (LON:TSCO) Have A Healthy Balance Sheet?
    Simply Wall St.

    Does Tesco (LON:TSCO) Have A Healthy Balance Sheet?

    The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

  • How Does Tesco PLC's (LON:TSCO) Earnings Growth Stack Up Against Industry Performance?
    Simply Wall St.

    How Does Tesco PLC's (LON:TSCO) Earnings Growth Stack Up Against Industry Performance?

    For long term investors, improvement in profitability and outperformance against the industry can be important...

  • Here's What You Should Know About Tesco PLC's (LON:TSCO) 2.5% Dividend Yield
    Simply Wall St.

    Here's What You Should Know About Tesco PLC's (LON:TSCO) 2.5% Dividend Yield

    Today we'll take a closer look at Tesco PLC (LON:TSCO) from a dividend investor's perspective. Owning a strong...

  • Are Tesco PLC's (LON:TSCO) Interest Costs Too High?
    Simply Wall St.

    Are Tesco PLC's (LON:TSCO) Interest Costs Too High?

    Tesco PLC (LON:TSCO), a large-cap worth UK£22b, comes to mind for investors seeking a strong and reliable stock...

  • Moody's

    Tesco Corporate Treasury Services plc -- Moody's announces completion of a periodic review of ratings of Tesco Plc

    Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Tesco Plc and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.

  • Tesco Working on Cashierless Stores as Competition With Amazon Heats Up
    Bloomberg

    Tesco Working on Cashierless Stores as Competition With Amazon Heats Up

    (Bloomberg) -- Tesco Plc has turned to an Israeli startup for help as it looks to become the next major food retailer to remove cashiers from some of its stores.The U.K.’s largest grocery chain is working with Trigo Vision Ltd., which has developed a system of cameras and software that allows retailers to automatically charge customers, according to three people familiar with the matter.Tesco and other grocers are racing Amazon.com Inc., which could open as many as 3,000 checkout-free Amazon Go stores in the U.S. and is expanding its partnership with the U.K.’s Wm Morrison Supermarkets Plc. Scrapping cashiers could also help Tesco slim down its workforce over time and improve profit margins as it battles German discount chains Aldi and Lidl.At a capital markets day earlier this month, Tesco said it’s looking at a range of new technologies, also including robot delivery vehicles. Checkout-free stores are “one thing we’re testing, but it’s not something we’re ready to roll out yet,” a spokeswoman said, declining to comment on any business partners for the technology.Trigo, which has raised $7 million from Vertex Ventures and Hetz Ventures, has also partnered with Israel’s largest supermarket chain, Shufersal Ltd. The companies are working on the pilot branch in Tel Aviv, with the goal of rolling out the product in about a year.Other startups, including Portugal’s Sensei, are competing with Trigo to provide grocers with checkout-free technology. Tesco has previously trialed an app that allowed customers to scan and pay for groceries using their smartphone. The Scan Pay Go app was limited to staff at Tesco’s headquarters last year.To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.netTo contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Moody's

    Tesco Corporate Treasury Services plc -- Moody's upgrades Tesco to Baa3; stable outlook

    Moody's Investors Service has today assigned a new long-term issuer rating of Baa3 to Tesco plc (Tesco), the UK's largest grocer. Concurrently, Moody's has upgraded the senior unsecured ratings of Tesco and its guaranteed subsidiary Tesco Corporate Treasury Services plc to Baa3 from Ba1 and the short-term of Tesco and its guaranteed subsidiary Tesco Treasury Services PLC to Prime-3 from Not Prime.

  • Bloomberg

    Billionaire's $6.6 Billion Bid Comes with Strings

    (Bloomberg Opinion) -- Even the most unloved companies in the least popular industries can attract takeover interest in the end.The tentative 5.8 billion-euro ($6.6 billion) offer for German’s Metro AG shows that investors can see value in the most unlikely places. Part of the allure must be that the food wholesaler’s defense options are so very limited.Metro split into two in 2017, hiving off its consumer electronics business into Ceconomy AG. Since then, the remaining wholesale business has struggled under CEO Olaf Koch: By July last year, 12 months on from the demerger, its shares were down by about 45%.In August, billionaire Daniel Kretinsky and business partner Patrik Tkac acquired a stake from the Haniel family, one of Metro’s three big shareholders. Now the duo are back with an attempt to buy most of the company through their vehicle EP Global Commerce VI GmbH. The Haniels have pledged their remaining stake.The offer is clearly opportunistic. At 16 euros a share, it is just 3% above Friday’s close. That widens to a 35% premium to the price in August. Identifying the undisturbed share price here isn’t easy: Metro has gained on the expectation of a bid, but Koch, too, has been working hard to turn the company around.The CEO will have difficulty fighting this off. Finding alternative bidders will not be easy given the challenges facing the industry. Sales have been declining and private equity firms are likely to be wary. Metro might look superficially tempting to Tesco Plc, which bought U.K. wholesaler Booker last year. But notably absent from the grocer’s investor update last week were any plans to expand Booker internationally.If there’s any prospect of a counter-bid, it would most plausibly come from Asia. Metro is in the process of selling its Chinese arm perhaps for as much as $2 billion. Potential buyers may now see the opportunity to buy the whole group.Koch can really only try to argue that shareholders would miss out on a recovery by selling now. EP Global would bring no industrial synergies to a deal: There is nothing it can do that Metro shouldn’t be able to do by itself. The snag is that Koch has been around for seven years and has had ample chance to try.The attitude of the big shareholders will be critical. The Haniels seem to be losing patience. What Meridian Stiftung, with 14%, and Otto Beisheim foundation, with 7%, think isn’t yet clear.If Kretinsky's offer gets him to about 75% ownership, he could reach a so-called domination agreement, giving him control of the group’s cashflow without having to buy the whole company. If other shareholders consent, he might be able to secure such an accord with a lower stake. They might well do so, as these deals typically involve a guaranteed backstop price for minorities and decent dividends in the meantime.If Metro finds a buyer willing to pay more, Kretinsky would still get out at a profit. Or, if he struggles to get enough support, he could walk away. The offer is provisional. EP Global already had options to buy shares from the Haniels and others that would have taken it above the 30% threshold that would force a mandatory bid under German rules. Instead, it has structured the offer as conditional on reaching an as yet unstated acceptance hurdle. That keeps EP off the hook – hence the shares haven't risen much above the price being dangled.Credit to Kretinsky: He appears to win in every scenario. Koch by contrast, has a fight on his hands.\--With assistance from Andrea Felsted.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • The Bitter Contest for China’s Online Shoppers
    Bloomberg

    The Bitter Contest for China’s Online Shoppers

    (Bloomberg Opinion) -- Carrefour SA, Europe's largest retailer,  may be the latest Western company to pull back from China. It’s unlikely to be the last.On Monday, the hypermarket operator said it would sell 80% of its China business for 4.8 billion yuan ($699 million) in cash to Suning.com, the Chinese retailer backed by Alibaba Group Holding Ltd. Carrefour will retain a 20% stake. Over the past few years, the French company’s plans to shrink its China footprint has been one of the worst-kept secrets in banking. Though Carrefour sold the business pretty cheaply – with a valuation of 0.2 times 2018 sales, compared with the industry average of 0.84, according to Citigroup Inc. – loosening its ties to the mainland may be a smart move, whatever the price. With sales in the country flagging and losses piling up, the deal comes as China’s macroeconomic picture is also darkening.Yet the key challenge for Carrefour preceded the trade war. In recent years, online-only players such as Alibaba have been piling pressure on brick-and-mortar operations, with Tesco Plc, Best Buy Co. and Marks & Spencer Plc each announcing plans to pull back from the mainland market. Carrefour’s share of the country’s hypermarket segment fell to 4.6% last year from 8.2% in 2009, Citi writes.(1)   That’s a problem in a country with one of the world’s biggest rates of e-commerce penetration. China's online retail sales reached 3.86 trillion yuan in the first five months of this year, accounting for more than one-fifth of the country's total purchases of consumer goods, according to a recent report by the Chinese Academy of Social Sciences. To make matters worse, foreign brands no longer have the cachet they once enjoyed – at least in low-end consumer goods. In a survey last year, Credit Suisse AG said that Chinese consumers preferred domestic purveyors in categories like food and drinks and home appliances. With the trade war whipping up nationalist fervor, that trend may accelerate: The bank's latest poll of shoppers 18 to 29 years old showed that 41% preferred phones made by Huawei Technologies Co., up from 28%, while interest for Apple Inc.’s products fell to 28% from 40%.For many firms, ceding control to a local partner is probably the best way forward. Carrefour appears to be borrowing a page from the playbook of McDonald’s Corp., which sold 80% of its China business in 2017 to a tie-up between state giant Citic Group Corp. and private equity firm Carlyle Group LP.Or consider Walmart Inc., which sold its e-commerce delivery site to JD.com Inc. in 2016 in exchange for a stake in the Chinese retailer. The U.S. firm now aims to open 40 of its Sam’s Club stores in China by 2020. Costco Wholesale Corp. is also betting on China’s appetite for bulk buying, with plans to open its first bricks-and-mortar store in August. Whether Costco can pull this off without a local partner remains unclear.What is clear is that Carrefour won’t be the last retailer to rethink its China strategy. Germany's Metro AG is also looking to sell its $1.5 billion Chinese business. At a time when Chinese acquisitions overseas have dried up, bankers at least can thank Western firms for managing to drum up some business from the mainland. (1) The bank citesEuromonitor International research.To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Britain's Tesco says no timetable for 'finest' store launch
    Reuters

    Britain's Tesco says no timetable for 'finest' store launch

    Tesco, Britain's biggest retailer, said it is considering a trial of an upmarket convenience store under the 'Tesco finest' banner but has not disclosed when or where a pilot will be launched. Tesco hosted a capital markets day for analysts and investors on Tuesday at which it presented a slide flagging an opportunity for a 'Tesco finest' store concept with a 7% operating margin - significantly ahead of the group-wide target of 3.5% to 4%. The premium 'finest' range of grocery products is Tesco's most expensive.