Tesco could be forced to capitalise on its dominant position this Christmas after two smaller rivals were taken private.
Analysts have predicted that the huge debts incurred in the takeovers of Morrisons and Asda will help Tesco shares surge.
Tesco chief executive Ken Murphy delivered better than expected first-half results earlier this month and City experts are predicting the company won’t be thrown off course by supply chain disruptions.
READ MORE: Tesco cuts prices across entire vegan range
Fifteen of the 19 City analysts who provide ratings for the stock recommend buying Tesco shares while none suggests selling.
Tesco’s share price was initially unaffected in June by the prospect of a Morrisons takeover.
But its trading momentum – coupled with rising market share and the likelihood of continued financial engineering at Morrisons and Asda – have now contributed to a 20 per cent leap in its share price since June, adding around £3.5 billion to its stock market value.
Last week, shareholders of Bradford-based Morrisons voted to sell to private equity firm Clayton Dubilier & Rice (CD&R) , advised by former Tesco boss Sir Terry Leahy.
Meanwhile, Asda was bought out last year by Blackburn’s Issa brothers in another private equity-backed deal, worth £6.8 billion.
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