Investors were less keen Tuesday than they were initially with Nash Finch’s planned tie-up with Spartan Stores.

After rising with the all-stock deal’s unveiling on Monday, Nash Finch’s stock sunk 7 percent Tuesday. Shares closed at $24.46, almost $1 below where they stood at last week’s end.

One of the few stock analysts who follows Edina-based Nash Finch downgraded the company from “buy” to “hold” Tuesday.

The analyst, Ajay Jain of Cantor Fitzgerald, liked the deal though — for both companies. It’s just that his investment thesis with Nash Finch had “played out” with the merger announcement, he wrote.

“We view [Spartan/Nash Finch] as a very good strategic combination with highly complementary assets,” Jain wrote in a report published Tuesday.

In nearly a century in the Twin Cities, Nash has grown into a Fortune 500 company with nearly $5 billion in annual sales. But the deal with Spartan reflects ongoing consolidation in the distribution business.

The companies, both of whose shares tend to be thinly traded, valued the transaction Monday at $1.3 billion.

Nash and Grand Rapids, Mich.-based Spartan are both primarily food wholesalers, though they also own some supermarkets. Food distribution is a mature industry, where growth often comes through consolidation.

The merged company will be based in Michigan, with some operations remaining in the Twin Cities, the companies said.

Dennis Eidson, president and CEO of Spartan, will be president and CEO of the new firm, which will have annual sales of about $7.5 billion.

Nash shareholders will own 42.3 percent of the new company; Spartan’s, 57.7 percent.

Nash Finch, which employs more than 8,000 people, has “approximately 500 workers in Minneapolis,” said a spokeswoman for the company. Spartan has said it expects to realize $50 million in savings from the deal, but has not said how many jobs might be cut to achieve that.

Jain wrote that he expects the majority of cost savings to be “heavily headcount-driven through the consolidation of back office operations.”

Based on the lack of geographic overlap with Spartan — which is focused on Michigan — Jain wrote that he doesn’t expect “significant warehouse consolidation potential at this time.”

Nash Finch has distribution centers in St. Cloud and in Fargo, N.D.

Spartan’s stock didn’t fare much better than Nash Finch’s on Tuesday. It fell $1.46, or almost 7 percent, closing at $20.58 — 62 cents below its closing price on Friday.

Volume in both stocks was relatively heavy again Tuesday, with 222,934 shares of Nash Finch trading hands. Last week, an average of about 32,000 shares of the stock traded daily.