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Brokers at ING call on Tesco to snap up Ahold

MARKET talk that Tesco should snap up Dutch rival Royal Ahold resurfaced yesterday, after analysts said that such a deal would boost the retail giant&rsquo;s US presence.<br /><br />Broker ING yesterday issued a note entitled &ldquo;Buying Ahold would actually make sense for Tesco&rdquo;.<br /><br />ING said that a potential &pound;13.5bn bid would be easily financed by Tesco&rsquo;s balance sheet and would push its 2011 pre-tax profits up by 31 per cent.<br /><br />Peter Brockwell and John David Roeg at ING said: &ldquo;The US market is too big for Tesco to ignore, yet any attempt to increase the scale of Fresh &amp; Easy could prove very risky. <br /><br />&ldquo;Ahold should be viewed as a one-off opportunity to acquire an undervalued asset at a low point in the US consumer cycle.&rdquo;<br /><br />Buying Ahold would add around 700 US grocery stores the 115 Fresh &amp; Easy stores that Tesco has opened since 2007.<br /><br />A Tesco spokesman declined to comment. But Ahold&rsquo;s shares climbed 1.34 per cent yesterday to &euro;8.69 (&pound;7.82) on the back of market talk. <br /><br />Ahold&rsquo;s share price was decimated in 2003 after it admitted $500m (&pound;304.6m) worth of accounting irregularities. Back then Tesco was believed to be mulling a bid for the group to aid its international expansion.