Two of Tesco’s biggest shareholders, which together hold just short 9 per cent of the company’s stock, have come out against the retailer’s proposed takeover of wholesaler Booker.

Schroders on Monday wrote to Tesco chairman, John Allan, urging him to withdraw from the merger.

In the letter, seen by the Independent and signed by fund manager Nick Kirrage and global head of stewardship Jessica Ground, the UK-based asset manager said that “the high price being paid for Booker makes the destruction of value even more likely [compare to an average deal].”

The letter said that Schroders would be encouraging other shareholders who voice this view to share it.

“Thus we urge you to reconsider and withdraw the offer,” it said.

Separately, the Financial Times reported that Daniel O’Keefe, who manages a fund at Artisan Partners, described Tesco as a “train wreck” that has over the last decade “expanded into new businesses [and] new geographies”.

“The company basically imploded before [CEO] Dave Lewis began a journey of simplifying, refocusing on the UK. We just don’t understand, in a business as fragile as retail, why on earth would we risk distracting ourselves from that huge goal,” Mr O’Keefe reportedly added.

Artisan Partners was not immediately available to comment when contacted by the Independent.

Both Schroders and Artisan Partners hold around 4.5 per cent of Tesco, according to Thomson Reuters data.

In January, Tesco, which is Britain's biggest retailer, announced that it was merging with Booker, the UK's top food wholesaler, in a £3.7bn deal.

In a joint statement, the two companies said that the combined group would bring benefits for consumers, independent retailers, caterers, small businesses, suppliers, and colleagues, and deliver “significant value to shareholders”.

But the tie-up is subject to majority consent from Tesco shareholders and resistance from two of its major stake holder could prove a considerable hurdle.

“Tesco says the merger will generate a return greater than the cost of capital within two years of completion […] but Schroders and Artisan Partners think it’s just too expensive and too risky,” said Neil Wilson, an analyst at ETX Capital.

In a statement on Tuesday Tesco said that it remains confident that the deal will enhance the “recovery plans for Tesco and deliver substantial benefits to customers and shareholders”.

Financially, it will unlock more synergies than Booker's operating profit for the 2016 financial year and deliver a return in excess of our cost of capital in the second year. Strategically, it builds on our core expertise of sourcing, distributing and selling food in the UK market and will enable us to enter the faster growing out of home food consumption market,” it said.

Tesco said that since announcing the transaction the majority of its top 10 shareholders had chosen to increase their shareholding in Tesco

“We hope to convince all our shareholders of the merits of the transaction,” it said.

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Shares in Tesco inched lower on Tuesday morning.