Tesco buys Hunter's Dobbies stake

Scottish entrepreneur Sir Tom Hunter has agreed to sell his stake in the Dobbies Garden Centre chain to Tesco.

The grocery giant has agreed to pay his West Coast Capital (WCC) investment company £36.3m for its 29.2% holding.

The 1200p a share offer from Tesco is well below its original offer last June of 1500p, which Sir Tom said had undervalued the Midlothian-based chain.

The deal will give Tesco a 94.7% shareholding in Dobbies and allow it to take the company private.

Last week the entrepreneur lost a legal battle with Tesco to prevent a £150m open offer of new shares to raise funds from investors for expansion.

It would have cost around £40m for WCC to buy the extra shares and maintain its stake in the business, which could otherwise have fallen to about 15%.

Dobbies was founded by James Dobbie in 1865 in Renfrew.

His first horticultural sale was seeds from a prize-winning leek.