A leading shareholder in J Sainsbury has resoundingly backed its proposed £12bn merger with Asda, saying that it would help the supermarket retailer to go “toe-to-toe” with Tesco.
Martin Walker, UK equities fund manager at Invesco Perpetual, the third largest shareholder in Sainsbury, said that Mike Coupe, the boss of Sainsbury’s, was putting his job and reputation on the line for a merger that offered “huge” financial benefits.
The fund manager, the first significant investor to publicly back the merger, said: “There are some real positives here in this deal and when I appraise it financially the earnings accretion are huge. The synergy costs are conservative and could be much bigger, but what I am most interested in is that the deal would appear to offer returns in excess of Sainsbury’s cost of capital.”
