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 18 May 2008 00:10 BST

Shareholder fights Dobbies share offer

Friday, 09 May 2008 09:35
Garden centre Dobbies says West Coast Capital is challenging its share offer

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Scottish entrepreneur Sir Tom Hunter has launched legal proceedings against garden centre chain Dobbies to block a proposed open offer to shareholders.

Sir Tom, who has a 28 per cent stake in the Midlothian-based chain, last year battled Tesco for control.

However, the board of Dobbies accepted the grocer's £15 per share offer and Tesco now holds a 53 per cent controlling stake in the group.

In April, Dobbies announced it would raise around £150 million by launching an open offer to shareholders, offering 12.4 million shares at £12 per share, on a six for five basis.

The offer is underwritten by Tesco, which wants to use the money to expand stores across the country.

Tesco is keen to go after the "green pound" and use the stores to offer consumers eco power solutions, such as wind turbines or solar panels for their homes.

However, Sir Tom's investment vehicle West Coast Capital is seeking an interim order to block the proposed offer.

In a statement, Dobbies said: "The board has carefully considered the merits of the open offer and believes that the open offer is in the best interests of the company and all of its shareholders.

"The open offer will enable the company to progress its stated expansion plans and the board believes that it provides access to funding on attractive terms in current market conditions which will be earnings enhancing.

"The company intends to present a robust defence of its strategy at the court hearing."

A spokesperson for West Coast Capital said: "It is a matter for the courts and West Coast Capital has no comment."End of story

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