Booker set for stock market return

Booker, the cash and carry chain, is returning to the stock market via a reverse takeover by Blueheath, a grocery wholesaler.

Blueheath has conditionally agreed to acquire the entire issued share capital of Giant Topco Limited, the holding company of Booker Group, through the issue of 1.34bn new ordinary shares in the acquiring company.

The new group, which will be called Booker Group will be led by Charles Wilson, formerly the right hand man of Stuart Rose, chief executive of Marks and Spencer. The enlarged group is expected to start trading on AIM in June.

Mr Wilson, who was credited with overhauling M&S’s supply chain and shaving £250m from its cost base shocked the City with his resignation from M&S two years ago. He left to join Booker as its chief executive in November 2005 before the recovery at the iconic high street retailer had started to take hold.

Richard Rose, executive chariman of Blueheath, will become non-executive chairman of the enlarged group, while Jonathan Prentis, finance director of Booker becomes chief financial officer.

The largest shareholder in the group with a 35.2 per cent interest, will be Milton, a company owned by BG, a wholly-owned subsidiary of Icelandic group Baugur and Fons Eignarhaldsfelag, an Icelandic investment company. Mr Wilson will own 8.1 per cent and other Booker employee shareholders will have a 14.4 per cent interest.

Mr Wilson said: “Booker has made great progress in the last 18 months and this transaction gives us the opportunity to take the group to the next level.”

Mr Wilson said he was particularly attracted to Blueheath’s ability to deliver to multi-site customers as well as its IT expertise. Blueheath, which was established in 2000, is a wholesaler specialising in software and also offers branded and private label goods. It started trading on AIM in July 2004 and operates from two national distribution centres in Thurrock and Wrexham.

Nicola Mallard, analyst with Investec, which is Booker’s broker, said of the link up with Blueheath: “They’re getting more expertise and this will also strengthen their delivery capablities.”

Booker is the UK’s largest cash and carry operation and offers branded and private-label goods to independent convenience stores, grocers, pubs and restaurants. In the year to March 2006, it made an operating profit before goodwill amortisation and exceptional items of about £22m on turnover of about £3bn. It operates in the cash and carry as well as the grocery and wholesale delivery markets which analysts say together are worth about £17.5bn.

It was acquired by Iceland Group in 2000, and renamed The Big Food Group, which was subsequently slimmed down and demerged from Iceland and acquired by Booker Holdings in February 2005.

Investec is the nominated adviser and broker to Blueheath.

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