Garden centre chain Dobbies today recommended shareholders to accept Tesco’s takeover bid.
The move came after Sir Tom Hunter’s West Coast Capital decided not to launch a rival bid.
In an announcement to the Stock Exchange, Dobbies said Tesco had offered 1500p a share, a 23.2% premium to the price on 29 May, the day before Dobbies announced it had been approached.
The offer equates to approximately 37 times Dobbies’ diluted earnings, making it one of the biggest multiples to be paid for a listed retailer.
Tesco needs to secure 50% shareholder approval by 19 August to succeed with the bid. It currently has 32.6%.
However, it will not be able to achieve the 75% required to delist the company. West Coast still owns 26% of Dobbies, and Hunter said he would not accept Tesco’s offer.
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