Tesco is facing a bidding war for Dobbies Garden Centres after private equity company West Coast Capital increased its stake in the business to 20.6%. The supermarket giant bought 22.6% in Dobbies last week and has commitments from shareholders to buy a further 2.7%.
Tesco has already gained the approval of the garden centre chain’s board to buy the company for £156m but West Coast could make a higher offer after acquiring its latest stake for £2.50 per share more than Tesco. Tesco paid £15 per share.
Sir Tom Hunter, the owner of Wyevale Garden Centres and Blooms of Bressingham, owns West Coast Capital. Hunter already owned 10% of Dobbies before buying the extra stake.
A spokesman says: “West Coast Capital is considering all its options in relation to its shareholding, one of which is a possible offer for the company. There can be no certainty that an offer will be made.”
Dobbies is the second biggest garden centre chain in the UK after Wyevale and has 21 stores, mainly in Scotland and north England.