Dobbies: the build-up

By Tuesday, Tesco had bought 32.6 per cent of Dobbies’ shares but still needed a further 17.4 per cent by Sunday for a management takeover.

If Tesco could not obtain the 50 per cent by Sunday, it would be prevented from making another bid for Dobbies for 12 months — unless another bid was made or with the consent of the Takeover Panel. By choosing not to make a counter-bid, WCC made itself unable to make an offer for six months. But it reserved the right to make an offer if Tesco’s bid lapsed. WCC continued to buy shares, picking up a further 0.9 per cent last Friday, taking its holdings to 26.9 per cent. It is restricted to acquiring only 30 per cent altogether in the next six months. So if Tesco’s bid failed, WCC could make another bid. But then Tesco is able to re-enter the process as well, meaning the situation remains in stalemate. Should Tesco achieve 50 per cent by Sunday, it is checkmate, although it has a significant minor shareholder in Hunter, who could make things awkward for the supermarket.

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