Experts are speculating who would or could buy Wyevale after The Sunday Times reported Guy Hands' private-equity company Terra Firma was in talks with advisers such as Goldman Sachs.
The smart money is on another finance house taking over, but commentators have questioned the reported £700m price tag for a company that has a turnover of less than £300m. The chain has 153 centres and has added about 30 since it bought Wyevale for £276m in 2012. Turnover stands at £290m, just over five per cent up in a year.
Concession income and gross margin also rose, as did operating profit. But Terra Firma, which wanted 200 centres before selling, is said to have found it hard to coax centres to sell. A financial spokeswoman for Wyevale said: "We cannot comment on rumours and speculation. There is nothing further to add and I can't say anything at all."
But Andy Newman, director at retail consultancy mdj2, said: "Any business owned by a venture capitalist is always up for sale, so I'm not surprised at all by this latest rumour. If you look at the typical cycle of ownership from venture capitalists, it's around five years. The garden sector is in good shape, so it would be a good time to sell.
"Furthermore, recent deals for Homebase and Argos have shown that there seems to be interest in retail acquisition deals again. But for my money it will go to another investment house. I don't think any of the big retailers with the finance would have an interest. B&Q isn't on the acquisition trail, Homebase has been taken over so is out of the market and Sainsbury's has just taken over Argos. Tesco is definitely out because it is busy with other things and the situation with Dobbies is well documented, and Morrisons is restructuring.
"However, the one that interests me is Nicholas Marshall, who was on the table for Homebase and knows the garden centre business very well. But the repeated asking price of £700m is inflated. Homebase went for around £340m and that's a £1.5bn turnover business. Argos sold for £1.3bn and its turnover is £4bn. There has been sale speculation before, which came to nothing. But the sector is healthy, so it would be a good time to sell. Wyevale will want to wait to get the price they want."
Ovation Consulting managing director Neville Stein said: "I'm not surprised at all it could be up for sale - that was always an anticipated outcome for Terra Firma. It does, however, add uncertainty to the supply chain because no one knows what the new owners will do.
"I would be very interested to see if Nicholas Marshall could get the financial backing - he is absolutely fantastic, a brilliant garden retailer. From a sector point of view I would rather Marshall ran the business than anyone else because he's a genius who when he ran the company brought it back to what it was all about - plants."
Squire's chair Dennis Espley said: "I was surprised to hear news of the possible sale and, if accurate, I would have thought they would try and make it bigger before trying to sell.
"I don't quite know who would buy it. Maybe a big retailer would step in or private equity people. It wouldn't of course be Squire's as Wyevale is on another scale - about 10 times bigger."
The business was sold to Terra Firma for £276m in 2012. Mention of big retailers chimes with speculation six years ago that supermarket giant Asda was in the frame as a possible buyer in 2009. Sir Tom Hunter bought the garden retail chain three years earlier in 2006 through another investment vehicle, West Coast Capital.