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Auction starts sale of Garden Centre Group

THE sale of the UK's biggest garden centres operator is set to be officially kicked off this week in an auction expected to raise some £300m.

The Garden Centre Group, which operates 131 outlets and owns the Wyevale, Woodlands and Blooms brands, is to be sold by taxpayer-backed Lloyds Banking Group, which took control of the business in 2009.

Sale documents are to be sent to prospective buyers this week, although representatives of the company are understood to have already been talking to interested parties in recent weeks.

Tesco, which already owns 26 Dobbies Garden Centres, is believed to be among those that have registered an interest. A number of private equity firms are also thought to be in the running.

Tesco took a controlling stake in Dobbies in 2008. Dobbies has previously said it has “ambitious growth plans to be a £1bn business with 100 stores in 10 years”. It is understood that Lloyds hopes to complete the sale by the end of the year.

The group is comfortably the biggest garden centre operator in the UK and employs 4,500 staff.

Scottish businessman Sir Tom Hunter and Icelandic investor Baugur bought the group in 2006 in a debt-fuelled deal. They used £370m of debt to pay £450m for the business, bankrolled by HBOS, now owned by Lloyds.


As the credit crunch hit, the level of borrowing became a problem. The bank took control of the business in a debt-for-equity swap, which diluted Sir Tom’s stake down to about 20%.

Lloyds, which is 41% owned by the taxpayer, has recently stepped up its efforts to clean up its balance sheet by offloading non-core assets.

Source: The Journal
www.nebusiness.co.uk/business-news/latest-business-news/2011/09/19/auction-starts-sale-of-the-garden-centre-group-51140-29447598/

19 September 2011
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