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Morrisons tries its hand at gardening with move for former Wyevale group

Supermarket giant Morrisons is planning to dominate a new field – garden centres.

It has asked for sale documents for the former Wyevale group.

Morrisons is one of several parties, including private firms Bridgepoint and Duke Street Capital, that have received information in the past few days about the Garden Centre Group, which was put up for sale by owner Lloyds Banking Group last month.

Buying GCG, which employs 4,500, would put Morrisons in direct competition with Tesco, which bought rival garden centre group Dobbies in 2008.

Tesco, which has 26 centres under the Dobbies brand, is not expected to bid for GCG. In April, Morrisons announced that it was offering garden centre products in 30 of its supermarkets.

Morrisons and Tesco declined to comment. However, both supermarket chains face strong competition from Bridgepoint. This is the third time the private equity firm, which owns Fat Face and Pret a Manger, has looked at buying GCG.

Six years ago it considered a move for GCG when the company carried out a strategic review. Then in 2006 Bridgepoint appointed investment bank Greenhill to advise on a bid.

Offers for GCG, which has 119 garden centres, are expected to come in at under £300 million.

The group was bought in 2006 for £445 million including debt by a consortium led by retail entrepreneur Sir Tom Hunter.

The consortium, which included property magnate Nick Leslau and failed Icelandic investment bank Baugur, made an unsuccessful attempt to scupper Tesco’s bid for Dobbies the following year by acquiring a large stake in the group. In 2008, Wyevale passed into the ownership of Bank of Scotland in a debt-for-equity swap after the group failed to manage its huge debt of £419 million.

The deal gave BoS, the sole lender, about 45 per cent of the shares in exchange for writing off most of the debt. It became Garden Centre Group the following year.

Source : Lawrie Holmes and Mark Foxwell - Thisismoney.co.uk
www.thisismoney.co.uk/money/markets/article-2044153/Morrisons-tries-hand-gardening-Wyevale-group.html#ixzz1ZbvAm6Kh

02 October 2011
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