>>> J Sainsbury shareholder Invesco Perpetual says proposed merger with Asda wil

J Sainsbury shareholder Invesco Perpetual says proposed merger with Asda will help to compete with Tesco
22 AUG 2018
J Sainsbury [LON:SBRY] shareholder Invesco Perpetual believes the UK-based supermarket group’s proposed merger with UK-based rival Asda will help the merged group, compete with Tesco [LON:TSCO], The Times reported.

The newspaper quoted Invesco’s UK equities fund manager Martin Walker, who said the deal includes “real positives” and that it offers “huge” earnings accretion.
Invesco Perpetual is J Sainsbury’s third-largest investor, the item noted.
The deal apparently offers returns higher than J Sainsbury’s cost of capital, Walker said.
J Sainsbury and Asda, a subsidiary of Bentonville, Arkansas-based Walmart Stores, Inc [NYSE:WMT], announced their proposed merger in April, promising revenues exceeding GBP 51bn (GBP44.29bn) and GBP 500m of synergies.
Walmart is to receive a 42% shareholding in the merged group and 30% of its voting rights as well as GBP 2.975bn in cash, the article noted.
Walker said the proposed structure of the merged group, under which Asda and J Sainsbury will retain their separate brands and headquarters, was similar to that of International Consolidated Airlines Group [LON:IAG], which owns the airlines Aer Lingus, British Airways and Iberia.
Walker thought competition concerns and worries about the reaction of suppliers to the deal were overstated, the item said. Walker added that some arguments against the deal seem illogical.
Although other top 20 investors contacted by the newspaper also expressed support for the merger, some voiced concerns about the possible difficulties of integrating the two brands.
J Sainsbury’s market capitalisation stood at GBP 7.43bn at the close of trading in London on Tuesday, 22 August.