DGC Dobbies Garden

RNS Number:8692B
Dobbies Garden Centres PLC
10 August 2007


DOBBIES GARDEN CENTRES PLC ("Dobbies")



RECOMMENDED CASH OFFER FOR DOBBIES BY TESCO HOLDINGS


The Board of Dobbies is today writing to all Dobbies shareholders to explain why
it believes that it is in their best interests to accept what the Board regards
as a very generous offer for their shares from Tesco Holdings. The Board's
reasons for recommending that all Dobbies shareholders accept the Offer from
Tesco Holdings are that:


* in the opinion of the Dobbies Board, the Offer is an excellent offer
and is in the best interests of all Dobbies Shareholders;


* the Offer is the only offer available to Dobbies Shareholders;


* the Offer cannot now be increased (except if a competing offer is made
for Dobbies, or otherwise with the consent of the Panel) and, should it not
succeed, the Board believes this would have a material adverse impact upon the
Dobbies share price;


* the Offer values each Dobbies Share at 1500 pence in cash;


* the Offer represents a premium of approximately 23.2% to the Closing
Price of 1217.5 pence per Dobbies Share on 29 May 2007 (the day before Dobbies
announced that it had been approached), since when the FTSE All-Share Index has
fallen by 5.3%, and the FTSE All-Share General Retailers Index has fallen by
12.4%;


* the Offer represents a premium of approximately 109% to the Closing
Price of 717.5 pence per Dobbies Share on 30 May 2006, a year before Dobbies
announced that it had been approached;


* the Offer equates to a price:earnings ratio of approximately 37 times
Dobbies' diluted earnings per share and an enterprise value of approximately
17.5 times Dobbies' EBITDA, in each case for the twelve months ended 30 April
2007;


* the Offer represents the highest multiple of EBITDA paid in recent
quoted transactions in the UK retail sector other than in a distress sale; and


* the Offer is significantly higher than the exit multiples for the
acquisitions of both Wyevale Garden Centres plc and Blooms of Bressingham
Holdings plc.


On 9 August 2007 Tesco Holdings announced a further extension to the closing
date for its Offer, the final closing date being 1.00pm (London time) on Sunday,
19 August 2007. As at 1.00pm (London time) on 8 August 2007, Tesco Holdings had
acquired and had received acceptances in respect of an aggregate of 3,279,552
Dobbies Shares (representing approximately 32.6 % of the existing issued share
capital of Dobbies). The Offer is open for acceptance until 1.00pm (London time)
on 19 August 2007 only and, in the absence of a competing offer from a third
party (or otherwise with the consent of the Panel), will not be extended beyond
that date unless it is by then unconditional as to acceptances.


Also on 9 August 2007, after considerable speculation that it would make a
counter offer, West Coast Capital (Lios) Limited ("West Coast Capital") (which
owns approximately 26.0% of the issued share capital of Dobbies) announced that
it does not intend to make an offer for Dobbies. West Coast Capital is bound by
that announcement for a period of at least 6 months from the date of that
announcement, subject to the terms of the City Code on Take-overs and Mergers.

The Offer from Tesco Holdings therefore remains the only offer available to
Dobbies shareholders.


The Offer is conditional upon Tesco Holdings receiving sufficient acceptances,
together with Dobbies Shares that it already owns, such that it controls over
50% of Dobbies Shares. The Offer does not require West Coast Capital's
acceptance in order to succeed.


In the event that Tesco Holdings fails to secure sufficient acceptances and the
Offer lapses, Dobbies Shareholders should be aware of the following potential
implications:


* Tesco Holdings would be precluded from making another offer for
Dobbies for at least 12 months (except in the event of a competing offer or with
the consent of the Panel);


* West Coast Capital would still be precluded from making any offer for
Dobbies for at least six months;


* Dobbies would be left with two major shareholders, one of which is
invested in competitors of Dobbies and the other may choose to find alternative
means of investing in the sector; and


* Dobbies could face difficulties in continuing to attract high calibre
employees, with a consequent direct impact on staff morale and future business
performance.


As a result, it is the strongly held view of the Dobbies Board that, if the
Offer lapses and the substantial "bid premium" currently available to all
Dobbies Shareholders through the Offer is removed, this may materially adversely
impact the Dobbies share price. Furthermore, if the Offer lapses then there can
be no certainty at this point as to whether and on what terms any new offer for
Dobbies might be made.


Recommendation


For all of the reasons set out above, the Board of Dobbies retains the view that
the Offer from Tesco Holdings is an excellent one and that it is in all
shareholders' best interests to accept it.


The Board of Dobbies which has been so advised by Deloitte Corporate Finance and
Bell Lawrie, considers the terms of the Offer to be fair and reasonable.
Accordingly, the Board continues unanimously to recommend that all Dobbies
Shareholders accept the Offer without delay.



Commenting further, Alex Hammond-Chambers, Chairman of Dobbies said:


"The Offer from Tesco Holdings comes after 10 years for Dobbies as a public
company, during which time we have received wonderful support from our
shareholders which in turn has enabled all of us at Dobbies to create a business
that a company of the size and standing of Tesco would like to own.


We retain the view that the Offer from Tesco Holdings is an excellent one and
that it is in the best interests of all shareholders to accept it. I believe it
is also in the interests of the customers of Dobbies whose support has been
important in the success of the Company; and of the employees without whose
commitment and hard work we would not have been able to realise the shareholder
value that the Offer from Tesco Holdings establishes."


Enquiries:

Dobbies
James Barnes
Sharon Brown                                               Tel:    0131 663 6778

Deloitte Corporate Finance (Financial Adviser to Dobbies)
Cahal Dowds
Roger Esler                                                Tel:    0131 535 7342

Bell Lawrie (Nominated Adviser and Joint Broker to Dobbies)
Sandy Fraser                                               Tel:    0131 225 2566

Shore Capital (Joint Broker to Dobbies)
Alex Borrelli                                              Tel:    020 7468 7932

Bell Pottinger Corporate & Financial (PR Adviser to Dobbies)
Ben Woodford
Emma Kent
Antonia Coad                                               Tel:    020 7861 3232


The Directors of Dobbies accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the Directors (who
have taken all reasonable care to ensure that such is the case), the information
contained in this announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.


Deloitte Corporate Finance is acting exclusively for Dobbies and for no-one else
in connection with the Offer and will not regard any other person as its client
nor be responsible to anyone other than Dobbies for providing the protections
afforded to the clients of Deloitte Corporate Finance nor for providing advice
in relation to the Offer or any matter referred to in the Offer Document or this
announcement. Deloitte Corporate Finance is a division of Deloitte & Touche LLP,
which is authorised and regulated by the Financial Services Authority in respect
of regulated activities.


Bell Lawrie, a division of Brewin Dolphin Securities Limited, which is
authorised and regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for Dobbies and no-one else in connection with
the Offer and will not be responsible to anyone other than Dobbies for providing
the protections afforded to clients of Bell Lawrie nor for providing advice in
relation to the Offer or this announcement.


The Offer (including the Loan Note Alternative) is not being made, directly or
indirectly, in or into, and is not capable of acceptance in or from, Canada,
Australia or Japan. Accordingly, copies of the Offer Document, the Form of
Acceptance, this announcement and any related documents are not being, and must
not be, mailed or otherwise forwarded, distributed or sent in or into or from
Canada, Australia or Japan. Custodians, nominees and trustees should observe
these restrictions and should not send or distribute the Offer Document, the
Form of Acceptance or this announcement in or into Canada, Australia or Japan.
Any persons (including nominees, trustees and custodians) who may have a legal
or contractual obligation to forward the Offer Document, the Form of Acceptance
or this announcement and any related documents to any jurisdiction outside the
United Kingdom should seek appropriate advice and read paragraph 13 of the
letter from Tesco set out in Part II of the Offer Document and Part B of
Appendix I to the Offer Document before doing so.


The Board of Dobbies has received independent advice for the purposes of Rule 3
of the City Code solely from Bell Lawrie. In providing their advice, Deloitte
Corporate Finance and Bell Lawrie have each taken into account the commercial
assessments of the Dobbies Directors.










                      This information is provided by RNS
            The company news service from the London Stock Exchange

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