Wily Wilson's income punt
So, the UK M&A market has roared back into life with a fresh multi-billion deal announced this morning - Tesco's £3.7 billion takeover of wholesaler Booker.
On the face of it, it might not seem that great a deal for Charles Wilson, the chief executive of Booker, as he isn't getting any cash for his 113 million Booker shares. Instead, Wilson is receiving Tesco stock, which has been locked up for five years i.e. he can't sell any of it (see the below paragraphs) from the deal announcement.
· In connection with the Mix and Match Facility, Charles Wilson, the Chief Executive Officer of Booker has irrevocably undertaken to elect to receive 100 per cent. New Tesco Shares in respect of his entire holding of Booker Shares, subject to the elections of other Booker Shareholders.
· Charles Wilson has also entered into the Lock‑up Agreement pursuant to which he has agreed not to (subject to certain customary carve-outs) dispose of his current holding of 24,533 Tesco Shares and the New Tesco Shares he will receive pursuant to the Merger without Tesco's consent during the lock-up period of five years from the Effective Date.
I'm presuming Wilson is trying to avoid a rather large capital gains tax bill? And given Tesco has also today said it plans to reinstate its dividend in 2018, that's some decent income given cash in the bank currently generates savers diddly squat...