Dobbies Garden Centres Share Discussion Threads

[spongman] 07/8/2007 16:50

Gengulphus,

"...everybody else no longer really counts at all, but is just along for the ride." LoL - At least I got a laugh at the end of the day! :-)

All well reasoned Arguments there; just goes to show how many possible outcomes there still are in this scenario.

Could Tesco let the price drop and try to mop up a few more at below 1500 (or just above) to leave some fat for another bid? - By this time Sir TH has had to play his hand.

Best of Luck anyway to all (whatever u wish for) in this one over the next couple of days.

regrds
$pong

p.s. Sir TH/Sir TL - Pistols at Dawn? - That might sort it out! lol

[gengulphus] 07/8/2007 10:07

Stalemate forever would suit me fine. It's a good company and I'd like to continue owning part of it. If Tesco and Tom Hunter each own 25-30% of it, there's still enough around for others, and plenty of opportunity for future competition between them to take it over...

However, a plausible scenario is that Tesco extend the deadline for their offer (I cannot imagine them not doing so at this point), Tom Hunter decides not to bid, as a result the share price drops below 1500p, and then a lot of other investors accept the Tesco offer. Tesco end up with more than 50%, so have operational control; Tom Hunter ends up with more than 25%, so Tesco don't have full control; everybody else no longer really counts at all, but is just along for the ride.

Of course, under that scenario, Tom Hunter effectively gives up the chance ever to get the company... So basically, if he decides not to bid at this point, his prospects of doing so in the future are purely in the hands of third party investors deciding whether to hang on to their stake and hope he does so later (to be precise, at least 6 months later) or to take what they can get for it now. Given the often short-term way in which investors often make that sort of decision - especially investors attracted in by the bid situation - that's a considerable risk, and so an incentive for him to bid now.

Gengulphus

[spongman] 07/8/2007 02:22

On ballance, I go for stalemate this time round. Tesco's have just about enough of what they want (i.e a substantial holding) and the ear of the management, and Sir TH has plenty of what he wants to keep Tesco off his lawn. Trouble is, I can also see stalemate forever!

AIMHO

Regrds
$pong

[wahlenm] 06/8/2007 18:23

Takeover panel announcement



So Sir TH has to decide what to do by 9 August (either put up or shut up for 6 months)

Tesco will probably announce after 1pm on 8 August that it has not got enough acceptances for the offer to go ahead (50%). I cannot work out if it can announce an improved offer at the same time. If it can make an improved offer I expect it to do so that it can get 50% and control of the company. It knows that Sir TH must offer a minimum of £18.43 per share or walkaway for 6 months. Sir TH can always come back after 6 months with an offer at whatever level he feels is the correct level but Tesco will want to get 50% now to lock him out.

[gengulphus] 06/8/2007 14:32

What sort of deal do you think he can have made? Tesco cannot pay him more than 1500p per share without raising their offer (*) and I cannot see that being attractive to him: short term, it would be a loss, and long term, it would set back what look to have been his plans for the garden centre sector.

Following the exercise of the call options by Tesco, both sides have a blocking stake. So either one side is going to have to offer enough to buy the other out, or one side is going to have to offer enough to get a 50% stake and settle for having the other side as a minority holder, or both sides are going to have to settle for a stalemate. In the last case, I suspect that we're likely to get a repeat of the battle at some point in the future, probably after enough time has elapsed that they are no longer bound by the prices they've paid recently.

(*) No, I'm not familiar enough with the Takeover Code to know for certain whether they can raise their offer - though I don't think I've seen any of the standard reasons for them not being allowed to raise it, such as them describing their offer as "final".

Gengulphus

[mikeran] 06/8/2007 12:49

Or maybe TH has done a deal with Tesco- about to take the the money and living to fight another day ?

[spongman] 06/8/2007 11:41

From the 10.07 news update ....

"Dobbies' shares are continuing to trade well above the offer price, with
investors apparently believing a counter offer from Hunter will be forthcoming.
Under Takeover Panel rules, Tesco cannot raise its offer unless a competing
bid is made."


Surely, if that last sentence is correct, then that's game over isn't it? Sir TH's spoiler has worked. why would he bid up to these sort ofprices when he can sit back and let the price fall when Tesco goes away then average down at some future point and make a bid lower than this.

Anyone any opinions?

TIA
Regrds
$pong

[badtime] 04/8/2007 14:18

Little bit in the indie...more news expected next week...apparently.

[badtime] 03/8/2007 21:02

Lol...

Bought a few more first thing...more as a punt than anything...what now eh

[gengulphus] 03/8/2007 15:19

Hmm... The RNS came out at noon and 2 hours and 43 minutes go by before I spot it and post, without any market activity. Four minutes later, a burst of buying starts that drives the price up over 50p...

Probably just coincidence, but it could easily give me delusions of grandeur! ;-)

Gengulphus

[gengulphus] 03/8/2007 14:43

Tesco's offer has been cleared on competition grounds by the OFT:



Gengulphus

[badtime] 03/8/2007 09:02

Up again today...anticipation of news?

[badtime] 02/8/2007 20:12

Interesting that full whack was having to b paid for 2500 shares

[linhur] 02/8/2007 17:15

Looks like I am a day out

[linhur] 01/8/2007 22:48

I would expect some answers to the many questions tomorrow.Time for the Competition Commission to makes its mind up whether it is a lion or a chicken.

[badtime] 31/7/2007 18:04

spreads closed again today and a nice 10k buy

[badtime] 30/7/2007 18:19

that 25k at mid price didnt look a sell to me..an someone picked up 10k near end of day..interesting

[badtime] 27/7/2007 19:57

Well someone dumped a few 2day at 1585

[tuffbet] 24/7/2007 15:44

My guess is just holding ground in the current market is going to mean outperformance but we shall see.

Anyway on the subject of Dobbies and Tesco this article from the Herald is worth a read.

[badtime] 23/7/2007 17:06

all gone very quiet

[wahlenm] 20/7/2007 08:36

Link to Tempus article in todays Times-------hang on

[ch3riton] 19/7/2007 22:48

Gengulphus/Wahlenm and others

many thanks for all this. Your position was the one I had arrived at, but now I know why it was the right one.
The information arriving on this site in cases like this is simply superb.

Ch3riton

[wahlenm] 19/7/2007 20:19

I agree with most of what Gengulphus says. I add only that because of the following notice, there is no point in Tesco upping their offer till after 2 August. I am certain Tesco will not win at £15. If they get 50% acceptances they can run the company but they cannot take it private because TH has 25%. There will still be a quoted company and it will get bigger with the money Tesco is expected to put in. Tesco will not want their work to benefit the current shareholders who do not sell.

Enterprise Act 2002 - Prior Notice of Mergers

The Office of Fair Trading received on 21 June 2007 a Merger Notice under
Section 96 of the Enterprise Act 2002 (the Act) in respect of the proposed
arrangements for:

Anticipated acquisition by Tesco Holdings Limited of Dobbies Garden Centres plc

The OFT now gives notice that in accordance with Section 97(2) of the Act the
period for consideration of this Notice has been extended by a further period of 10 working days. The period for considering this Notice will therefore expire on 2 August 2007.

[gengulphus] 19/7/2007 10:00

Note that there has also been another rule 8.1 announcement: West Coast Capital (i.e. Tom Hunter) has picked up another 25,000 shares at 1600p, taking his stake to 26.02%.

An interesting situation. For small shareholders, accepting the offer is quite simply a silly thing to do - if you want to sell, why accept 1500p when you can get around 1600p on the market, and that level is supported by Tom Hunter's demonstrated willingness to continue buying at that level?

For large shareholders who want to sell, it's trickier: Tesco's offer can be accepted for their entire shareholding, while the 1600p market price is limited by how many shares the market will accept. And that in turn is limited by how many shares Tom Hunter will accept - bearing in mind that if he accepts more than about another 400k shares, he's got to make an offer at at least 1845p.

For both small and large shareholders, the possibility of him making that offer and the possibility of that triggering a bidding war is an incentive not to sell. So he doesn't actually have to mop up all that many shares on the market to support the price at 1600p - at the current rate of picking up 25,000 shares about every 2 weeks, he could easily continue for another 6 months...

On the other hand, the Takeover Code does discourage offer periods from lasting too long, in order to avoid excessive distraction of management from their main job of running the company, and in order to cut them short, the Takeover Panel can and does issue "put up or shut up" deadlines to potential bidders, requiring them either to make a bid or formally commit to not making a bid. I'm pretty certain they would do that long before those 6 months were up.

Also, as Tom Hunter's stake creeps up towards 30%, his capacity to absorb a large shareholding without making a bid steadily decreases - this slowly and steadily increases the risks for large shareholders who do want to sell and are just angling to get the best price. That may speed up the rate of selling, requiring Tom Hunter to buy at an increased rate to continue supporting the price at around 1600p.

And Tesco can of course at any point try to alter the way things are going in their favour, by increasing their offer. At present, they're presumably calculating that:

* If they put the offer up now, it will end up costing them a great deal more in the event that Tom Hunter does not want to bid.

* If they don't put the offer up now, it will slightly increase Tom Hunter's resources in the event that he does want to bid, because he can pick up about another 4% of the company at about 1600p rather than 1645p+.

Overall, that balances out as an argument against raising the offer now unless they assess the chances that Tom Hunter is going to bid as very high...

It will be interesting to see how it all works out!

Gengulphus

[darrin1471] 19/7/2007 08:33

Tesco PLC said it has received valid acceptances for 2.06 mln Dobbies Garden Centres PLC shares, representing about 20.5 pct of the company, as of July 18, the first closing date of its offer.
Tesco said the offer is being extended and will remain open for acceptance
until Aug 8.
Tesco, which already held 1.18 mln shares in Dobbies, now holds a total of
3.24 mln shares, or about 32.2 pct in the company.
On June 8, Tesco, the UK's biggest supermarket chain, made an agreed 1,500
pence a share cash offer for Dobbies, valuing the business at around 155.6 mln
stg.