Tesco in £155m garden centre bid

Tesco believes gardening in the UK has a big future

Supermarket giant Tesco has looked to underline its green credentials, with a £155.6m bid for the Scotland-based Dobbies Garden Centre chain.

Tesco said it was hoping to cash in on the increasing popularity of gardening and the trend towards "green" products - from solar panels to compost bins.

An ageing and more wealthy population also meant the UK gardening sector had a bright future, it added.

It wants to expand the Dobbies brand, which has 21 stores.

The garden centre chain's board is urging its shareholders to back Tesco's £15-per-share offer.

Green demand

Tesco chief executive Sir Terry Leahy said it was an "exciting opportunity" for the supermarket.

By Tesco's standards, Dobbies is just a light snack, a bit of plankton Robert Peston, BBC business editor Read Robert's analysis in full

"The deal is an important part of our strategy to provide customers with greater access to affordable energy saving and environmental products," he said.

"Garden centres are ideally placed to support this, because for many people, gardening is the way they express their desire to be green."

Products such as water butts, composting kits and organic fertilisers, as well as carbon-efficient home insulation, domestic wind power generators and solar panels, could meet this demand, he added.

"It is an excellent business with a first-class management team and a great brand that we will retain and develop from its Scottish base," Mr Leahy said.

"The brand name is strong and already well-respected in the local communities in which Dobbies operates."

Chairman of Dobbies, Alex Hammond-Chambers said that the deal would "allow our Scottish success story to grow".

Tesco said it had already secured an agreement to buy 22.6% of the firm.

Separately, Dobbies announced a pre-tax profit of £2.5m in the six months to the end of April, a 46% rise.