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Terra Firma, Apax close in on Garden Centre Group

Terra Firma and Apax are among a handful of private equity firms through to the second round of bids for the Garden Centre Group, the gardening specialist that is up for sale for up to £300m.

Lloyds Banking Group – which owns about 40 per cent of GCG – put the 130-store chain up for sale by appointing advisers at Rothschild and first round bids were due in the middle of October.

Other private equity firms, such as Bridgepoint, submitted bids for GCG but have now dropped out of the race to acquire the retailer, formerly called Wyevale. Second round bids are due before the end of November.

Tesco, the supermarket giant that owns the Dobbies chain, requested to see the sale document on GCG but did not submit a first round bid.

The grocer was only interested in a small number of stores and the garden centres' shareholders – which also include the billionaire philanthropist Sir Tom Hunter, with a 20 per cent stake, want to sell the entire business.

The Bradford-based grocer Morrisons has also been linked to GCG but it is unclear if it is still involved in the process.

GCG made a pre-tax profit of just £860,000 in the year to 26 December 2010, which was down sharply on the previous year's £13.2m.

But trading is understood to have improved this year, helped by April's heatwave. The GCG's property estate has been valued at about £300m, as it includes a large number of freeholds.

The private equity tycoon Guy Hands, who founded Terra Firma, is best-known for his ill-fated £4.2bn acquisition of the music group EMI in 2007. He lost control of EMI to Citigroup this year and the US investment bank is now trying to sell the record label owner.

All parties declined to comment.

Source : James Thompson – The Independent

03 November 2011
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