Hunter will fight on, say market watchers
West Coast Capital’s (WCC’s) Sir Tom Hunter will not allow Tesco to “take the market and run with it on its own”, it was suggested after the battle for Dobbies reached its peak as Horticulture Week went to press on Tuesday.
Business adviser Leslie Kossoff said: “Hunter is not finished and Tesco is just starting. The key for garden retailers is to watch how this is played out and see how they want to position themselves.”
Hunter’s decision last Thursday not to counter-bid for Dobbies had done little to help Tesco reach the 50 per cent share threshold required to take over the chain.
While some pundits believed on Tuesday that the retail giant would now gain the toehold into the garden centre sector that it wanted, it seemed likely that Hunter’s almost 27 per cent, acquired through investment vehicle WCC, would hamper Tesco’s ambitions.
WCC last week responded to the Takeover Panel’s “put up or shut up” request by announcing that it would not contest Tesco’s £15-per-share bid.
Hunter criticised Dobbies’ board for not putting the company out to auction and claimed Tesco’s offer undervalued Dobbies.
WCC’s board said Dobbies’ shareholders’ interests would have been “better served” if the board had “created a framework that would have allowed a more competitive bidding process to take place” to maximise value for them.
Dobbies rejected Hunter’s criticism, saying that WCC could have made a bid at any point.
A garden centre insider said a letter from WCC to Dobbies’ shareholders had been “quite specific” in its criticism of Dobbies’ directors over the lack of an auction.
“The inference you could draw is that they bought shares at £18.30 but they’re not prepared to make a bid at that price,” he said. “But they think the shares are worth between £15 and £18.30.”
If shareholders recognised that and held on to their shares, then another bid could well be on the cards, he added.
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