Tesco Compensation Scheme

As announced on 28 March 2017, Tesco PLC has agreed with the FCA (under its statutory powers) to establish a compensation scheme for certain shareholders and bondholders to be administered by KPMG.

The Scheme has been set up in connection with Tesco’s Trading Statement of 29 August 2014 regarding our profit outlook for 14/15. It was corrected on 22 September 2014.

As a result, we will pay compensation to certain purchasers of Tesco shares and bonds in the period from 29 August to 19 September 2014. 

The Tesco Scheme is administered by KPMG, and as part of this role, KPMG will do its best to contact eligible claimants to enable them to bring their claim.

KPMG has now opened the scheme, and you can find out more, or submit your claim, at www.kpmg.co.uk/tesco-scheme. You can also contact the KPMG helpline for more information on 0808 164 6031, or write to KPMG LLP, PO Box 74451, London, E1W 9PB.

Please note that some brokers are assisting their clients with the claims process. If your broker has contacted you and you have agreed to them facilitating your claim, you do not need to take any further action until such time the Administrator writes to you providing you with log-in details for the claim portal.

The Tesco Scheme compensates:

  • Net cash purchasers of Tesco ordinary shares between 29 August 2014 to 19 September 2014 (both dates inclusive). If someone purchased more shares than they sold during the period 29 August to 19 September 2014, they will be a net purchaser.
  • Net purchasers of certain Tesco listed bonds between 29 August 2014 to 19 September 2014, (both dates inclusive) (a list of the relevant bonds can be found here). If someone purchased more bonds than they sold during the period 29 August to 19 September 2014 they will be a net purchaser.
  • The Scheme only compensates net purchasers where there is a genuine economic loss – so where the loss was mitigated by hedging it will not be eligible.

The amounts to be paid per net share purchase and per net bond purchase have been determined by the FCA. Each net purchaser of shares will be entitled to compensation of 24.5p per share purchased, plus interest at 1.25% per annum if the net purchaser is an institutional investor or 4% per annum if the net purchaser is a retail investor, in each case with such interest running from 19 September 2014 until approximately 4 months after the opening of the scheme.  Varying amounts are payable in respect of each relevant bond issue, again together with interest.  The compensation is based on the difference in price of the relevant shares and bonds between market close on Friday 19 September 2014 and market close on Monday 22 September 2014 after Tesco PLC had announced in the morning of Monday 22 September 2014 that it had identified an overstatement of its expected profit. It has been further adjusted for other industry-wide effects on the market and is intended to compensate investors who purchased shares and bonds at a time when the price was inflated by the Tesco’s Trading Statement of 29 August 2014. 

To make a claim you will need to provide evidence showing that you purchased Tesco shares or relevant bonds during the period 29 August 2014 to 19 September 2014. You will also need to provide evidence of any sales of Tesco shares or relevant bonds in this period. If you do not have records to hand, you may need to contact your broker to ask them to provide you with evidence of your transactions. Relevant evidence would include, for example, relevant monthly statements from around August and September 2014; and contract notes or exchange reports.

If your purchase of Tesco shares or relevant bonds hedged an exposure under derivatives such as (for example) contracts for differences or spread bets, you will also need to provide evidence of the relevant derivative transactions. Similarly, if your purchase of shares was hedged by derivative transactions during the period 29 August 2014 to 19 September 2014, you will need to provide evidence of them.

All claimants who put in an eligible claim will receive interest from 19 September 2014 to 120 days after the Scheme commences, even if their claim is determined earlier - or later - than this.

The scheme will close on 22 February 2018, therefore there is a real benefit in claimants putting in their claim as early as possible.