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Tesco wins garden centre war to buy Dobbies
LONDON (Reuters) - Tesco (TSCO.L), Britain's biggest retailer, has agreed to buy rival garden centre owner Tom Hunter out of Dobbies Garden Centres DGC.L, ending a long-running ownership battle and paving the way for Dobbies' expansion.
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 44 million pounds to retain his 29.2 percent blocking stake.
Supermarket group Tesco, which already owns about 65.5 per cent of Dobbies, said on Wednesday 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 pounds ($243 million).
The offer is well below the 1,500 pence Tesco offered for Dobbies last year and the 1,750 pence per share Hunter paid for a 10 percent stake in the company last June.
Tesco said Hunter, who owns his 29.2 percent stake in Dobbies via investment vehicle West Coast Capital, had agreed to accept its offer, which will give Tesco 94.7 percent of the company. Hunter will get 36.3 million pounds for his stake.
West Coast Capital controls around 110 garden centres in Britain through Wyevale and the Blooms of Bressingham chain, and 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 pound rights issue, which Tesco said in April it would underwrite to fund expansion.
In a separate statement on Wednesday, Dobbies said like-for-like sales fell 6.8 percent in the six months to the end of April, but were up 15.8 percent in the three weeks to May 18.
The company said it has opened and acquired four stores in the last thirteen 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.
Tesco shares were down 0.6 percent at 420.1 pence at 1029 GMT.
(Editing by Quentin Bryar)
