Tesco wins garden centre takeover war
Tesco, Britain's biggest retailer, has agreed to buy rival garden centre owner Tom Hunter out of Dobbies Garden Centres, ending a long-running ownership battle and paving the way for Dobbies' expansion. Mr Hunter, Scotland's richest man according to...
Tesco, Britain's biggest retailer, has agreed to buy rival garden centre owner Tom Hunter out of Dobbies Garden Centres, ending a long-running ownership battle and paving the way for Dobbies' expansion. Mr Hunter, Scotland's richest man according to the Sunday Times Rich List, last week failed to block a planned rights issue of shares by Dobbies which would have forced him to spend £44m to retain his 29.2 per cent blocking stake.
Supermarket group Tesco, which already owns about 65.5 per cent of Dobbies, said yesterday it has offered 1,200 pence per share in cash for the remaining shares, valuing Britain's third-largest garden centre company at about £124.5 million.
The offer is well below the 1,500 pence Tesco offered for Dobbies last year and the 1,750 pence per share Mr Hunter paid for a 10 per cent stake in the company last June.
Tesco said Mr Hunter, who owns his 29.2 per cent stake in Dobbies via investment vehicle West Coast Capital, had agreed to accept its offer, which will give Tesco 94.7 per cent of the company.
Hunter will get £36.3 million for his stake.
West Coast Capital controls around 110 garden centres in Britain through Wyevale and the Blooms of Bressingham chain, and Mr Hunter has long been a thorn in Tesco's side.
He resisted Tesco's previous offer for Dobbies last year and progressively raised his stake in an attempt to prevent Tesco strengthening its grip on the company. He opposed Dobbies' planned £150 million rights issue, which Tesco said in April it would underwrite to fund expansion. In a separate statement yesterday, Dobbies said like-for-like sales fell 6.8 per cent in the six months to the end of April, but were up 15.8 per cent in the three weeks to May 18.
The company said it has opened and acquired four stores in the last 13 months, bringing the total to 24 in Scotland and England.
Tesco said it plans to keep the Dobbies brand and its Midlothian, Scotland head office.
Supermarket group Tesco, which already owns about 65.5 per cent of Dobbies, said yesterday it has offered 1,200 pence per share in cash for the remaining shares, valuing Britain's third-largest garden centre company at about £124.5 million.
The offer is well below the 1,500 pence Tesco offered for Dobbies last year and the 1,750 pence per share Mr Hunter paid for a 10 per cent stake in the company last June.
Tesco said Mr Hunter, who owns his 29.2 per cent stake in Dobbies via investment vehicle West Coast Capital, had agreed to accept its offer, which will give Tesco 94.7 per cent of the company.
Hunter will get £36.3 million for his stake.
West Coast Capital controls around 110 garden centres in Britain through Wyevale and the Blooms of Bressingham chain, and Mr Hunter has long been a thorn in Tesco's side.
He resisted Tesco's previous offer for Dobbies last year and progressively raised his stake in an attempt to prevent Tesco strengthening its grip on the company. He opposed Dobbies' planned £150 million rights issue, which Tesco said in April it would underwrite to fund expansion. In a separate statement yesterday, Dobbies said like-for-like sales fell 6.8 per cent in the six months to the end of April, but were up 15.8 per cent in the three weeks to May 18.
The company said it has opened and acquired four stores in the last 13 months, bringing the total to 24 in Scotland and England.
Tesco said it plans to keep the Dobbies brand and its Midlothian, Scotland head office.