Shares in Blueheath rose 14.75p to finish on 27.5p yesterday following news of the online delivered wholesaler’s reverse takeover of cash & carry group Booker.

As part of the deal, which is subject to shareholder approval, Blueheath will acquire the entire issued share capital of Giant Topco Ltd, the ultimate holding company of the Booker Group, through the issue of 1,344,910,958 new ordinary shares in Blueheath. The new company will be renamed Booker Group, with estimated annual sales of more than £3bn.

However, analysts feared that the new group could struggle with low margins and competition from supermarkets. “The return of Booker will cause a cold sweat or two around the market,” Clive Black, an analyst at Shore Capital told the Financial Times.