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Wyevale Garden Centres rumoured to have submitted a bid for Dobbies

Wyevale website April 2016 725 x 500

The private equity tycoon Guy Hands is plotting a £175m takeover of Dobbies Garden Centres in an attempt to create an industry giant that would dwarf its nearest rival.

Sky News has learnt that Wyevale, which is owned by Mr Hands' Terra Firma Capital Partners, has in recent days tabled a bid for Dobbies, which has been put up for sale by Tesco.

Sources said that Goldman Sachs, the Wall Street bank, has been drafted in to assist Wyevale's bid, which would establish a group with about 175 sites across Britain - roughly six times the size of the next-biggest operator.

Tesco has set a deadline of this Wednesday for initial offers for Dobbies, which made a loss of nearly £50m last year.

Many of Dobbies' outlets are attached to Tesco stores, but the gardening chain has been put up for sale by the supermarket's boss as part of a clearout of non-core assets.

A successful bid by Wyevale for Dobbies could attract scrutiny from competition regulators and prompt the disposal of a number of stores, according to industry insiders.

While there is financial logic to a Dobbies takeover by an existing industry player, it could also raise questions about the future of the company's Midlothian head office.

Several private equity firms are also said to be preparing bids ahead of Wednesday's deadline.

Wyevale's bid follows a number of previous attempts by Mr Hands to buy Dobbies in recent years.

Justin King, the former Sainsbury's boss who now runs Terra Firma's portfolio, recently recruited Roger McLaughlan, a former Asda and Toys 'R' Us' executive, to run GCG.

His appointment put an end to speculation that Terra Firma was preparing for an imminent auction of Wyevale, which reports have suggested could command a £700m price tag.

Wyevale was acquired by Terra Firma to enable it exploit consumer trends which show that almost half of British adults participate in gardening, a figure which rises to nearly two-thirds of those aged 45 and above.

Terra Firma, which also owns Odeon and UCI Cinemas and the care home chain Four Seasons Health Care, declined to comment on Tuesday.

Learn more about Tesco's plan to sell Dobbie's here.

Source : Mark Kleinman - Sky News

http://news.sky.com/story/1681307/all-hands-on-deck-for-175m-dobbies-bid


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19 April 2016

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