Tesco to take Dobbies private within month

Published on Thursday 5 June 2008 10:39

SUPERMARKET giant Tesco has today confirmed that it will take Dobbies Garden Centre private within the next month.

The retailer said it has now finalised the purchase of the 3.02 million shares in the Lasswade-based company that were previously owned by Sir Tom Hunter's West Coast Capital.

It means Tesco has overcome the stiff resistance shown by Scotland's richest man, who recently took Dobbies to court over its plans for an open offer of new shares that would have diluted his stake.

It now owns just under 95 per cent of the shares in Dobbies - well ahead of the 75 per cent needed to take it private.

Tesco confirmed today that it is now planning to delist the company from the Alternative Investment Market on July 3.

The remaining five per cent of Dobbies shareholders have until June 24 to accept Tesco's offer for their shares.

Tesco's battle for control of Dobbies started a year ago when it tabled a 155.6 million bid for the company.

Sir Tom Hunter refused to sell and responded by gradually increasing his stake well beyond 25 per cent in order to make it impossible for Tesco to attain more than 75 per cent of shares.

A bitter feud developed, with Dobbies chief executive James Barnes accusing the billionaire of trying to scupper any deal for his own commercial ends.

In April, Dobbies announced it was to ask shareholders for 150m of additional funds through an open offer of shares, but it meant Sir Tom would have to invest more than 30m to maintain his stake - and he took the company to court over the plans.

However, at Edinburgh's Court of Session, Lord Glennie ruled against Sir Tom, saying the court should not be used "to further the interest of one or other party in a commercial sense".

Following the ruling, Sir Tom agreed to sell his 29.2 per cent stake to Tesco for 36.3m.

In a statement today, Dobbies said it "expects" trading of its shares to be cancelled on July 3.

Dobbies chief executive James Barnes said: "If Tesco control the business they can provide the resources needed.

"We have ambitious plans to grow the business and that can happen with Dobbies as a private company.

"Dobbies will remain a separate brand and a separate company, based in Dalkeith."

He said that the firm is about to submit a planning application to extend its headquarters and is due to take on another 10 HQ staff.