Tesco bids for garden centre chain

08-06-2007

Tesco bids for garden centre chain
Supermarket giant Tesco has made a £155.6 million bid to buy the Dobbies garden centre chain.

Tesco said the deal would allow it to meet increasing consumer demand for environmentally friendly products to help them become greener.

Dobbies, which has 21 stores across Scotland and England, has said it is recommending the 1,500 pence a share offer to its investors.

An agreement has already been secured by Tesco to acquire a 22.6 per cent stake in the garden centre firm, which has its headquarters in Scotland.

Under the proposed takeover deal Dobbies would retain its Midlothian base and own brand, Tesco confirmed in a statement.

Announcing the retailer's decision to move into the garden centre market, Tesco chief executive Sir Terry Leahy said: "The increasing popularity of gardening, and in particular the trend towards environmentally friendly products, makes this an attractive sector for Tesco to invest in."

He added that garden centres were "ideally placed" to support people's desire to go green through gardening and said the sale of products such as water butts, composting kits and organic fertilisers would support such demand.

"The deal is an important part of our strategy to provide customers with greater access to affordable energy saving and environmental products," Sir Terry explained.

Dobbies chairman Alex- Hammond-Chambers described the proposed sale as an "excellent deal" for the company's shareholders, customers and staff and said that merging with the Tesco group would allow the garden centre firm to grow into a "stronger and better" business.

"This deal will allow our Scottish success story to grow, bringing new stores and exciting new products across the UK," he added.

In a separate announcement today Dobbies announced that its pre-tax profit in the six months to April 30th climbed 46 per cent to £2.5 million.


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