Newspaper article The Evening Standard (London, England)

Dobbies Bid Plot Thickens as Sir Tom Takes on Tesco

Newspaper article The Evening Standard (London, England)

Dobbies Bid Plot Thickens as Sir Tom Takes on Tesco

Article excerpt

THE prospect of a bidding war for Dobbies Garden Centres sent shares in the nursery chain soaring today as property magnate Sir Tom Hunter squared up to mighty Tesco.

In an after-hours raid yesterday, Hunter moved to scupper the supermarket's proposed [pounds sterling]155.6 million takeover of Dobbies by snapping up 10% of the company to take his holding to 20.6%, just short of the 25% needed to block the Tesco deal.

Tesco's agreed offer last week valued each Dobbies share at [pounds sterling]15, but Hunter upped the ante by splashing out [pounds sterling]17.50 a share in last night's sudden move. His West Coast Capital investment vehicle also said it was "considering all its options in relation to its shareholding, one of which is a possible offer for the company".

Shares in Dobbies jumped 260p, or 17%, to 1785p today as investors gambled on an all-out bid from Hunter or an improved offer from Tesco. Said an analyst at Kaupthing: "Hunter's enlarged stake is close to a level that would be sufficient to block the current Tesco proposal, and may lead to Tesco raising its offer further beyond [pounds sterling]17.50." Hunter's interest in Dobbies is hardly surprising. In the past 12 months he has acquired Wyevale Garden Centres and Blooms of

Bressingham as he moves into the lucrative nursery sector.

Analysts believe he either wants to expand his garden centre empire by acquiring Dobbies or to stop Tesco becoming a competitor. Last week's bid from Tesco came as a shock to the City as Dobbies would represent its first non-food acquisition.

The wider London market was buoyed by a raft of upgrades in the City today and a strong performance on Wall Street and in Asia overnight. Global markets rallied after the Federal Reserve's Beige Book reporton the economy made an interest-rate rise across the Pond look less likely and US government bonds retreated from their recent five-year high.

The FTSE 100 index responded to the euphoria with a rise of 46.8 points to 6606.4, with only seven stocks in the red.

Bradford & Bingley topped the leaderboard with gains of 2034p to 42012p after Credit Suisse raised its rating from underperform to neutral and set a target price of 435p. …

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