Hunter sends warning with £50m spree Hunter buy raises the stakes

Published on Sunday 2 September 2007 00:06

SIR TOM Hunter appears to have raised the stakes in the tit-for-tat battle that has been raging between the Scots entrepreneur and Tesco over Dobbies Garden Centres, after he last night announced £50m of acquisitions to boost his rival chain Wyevale.

The move by Hunter, who owns a 29.31% stake in Dobbies and who was outspoken in his opposition to the Tesco takeover, came just 24 hours after the supermarket behemoth announced it would not pay shareholders who want to relinquish their Dobbies shares more than its offer price of 1,500p a share.

Hunter is thought to have paid as much as 1,845p a share for his Dobbies stake and stands to lose a significant sum if he sells at the offer price.

However, Hunter's latest move seems to be in line with industry expectations that he will attempt to thwart Tesco by using his stake in Dobbies to slow down any expansion plans - a tactic that would help Wyevale maintain its position as the UK's largest garden centre chain.

Hunter's stake in Dobbies is just 0.19% smaller than Tesco's, and he is capable of blocking key resolutions at Dobbies AGMs, including expansion plans or moves to delist the chain.

The first of Hunter's new acquisitions concluded on Friday, when he added Sanders Garden Centre to his Wyevale empire for an undisclosed sum. Industry observers have valued the deal at between 10m and 20m. Hunter says two more deals are in the pipeline for September, with all new purchases expected to exceed 50m.

A spokesman for West Coast Capital, Wyevale's parent company, said the deals would add 25m to Wyevale's annual turnover.

They would also come with 30 to 40 acres suitable for expansion - a move that will no doubt be interpreted by industry observers as a preemptive strike in preparation for any plans Tesco may have to grow the Dobbies chain.

However, the spokesman denied that the company was engaging in tit-for-tat tactics, saying the acquisitions had been in the running long before Tesco bought Dobbies in August.

He said: "These acquisitions together with our existing interest in Wyevale and our strategic stake in Dobbies reinforces our position as the leading player in the UK garden centre sector.

"This is a build, develop and consolidate story with a customer-centric strategy. Geographically these acquisitions will plug some gaps in our country-wide spread, but there are more to come, with our aim being to have 60 of these large destination sites over the next three to five years."