Essential reading for retailers and suppliers in the home improvement market

Hunter challenges Dobbies in court

Published: 10 May 2008
West Coast Capital wants share offer underwritten by Tesco called off as 'it is not in the interests of shareholders'.
Sir Tom Hunter has started legal action against Dobbies' proposed £150m rights issue as he says it is not in the interest of shareholders.

Hunter – the majority shareholder with a near-30 per cent stake – is to go to court to stop dilution of his stake and block the rights issue underwritten by Tesco, which has a controlling 65 per cent.

Dobbies plans to offer new shares on the basis of six for every five existing shares, at a price of £12 a share. If Sir Tom Hunter does not take up his allocation he will see his holding in Dobbies reduced to less than 15% while taking up his shares would cost him £44m.

In what has become a highly fractious situation, both parties are standing their ground.

Dobbies said its board had 'carefully considered the merits of the open offer' and that it was in the best interests of all of its shareholders.

Its chief executive James Barnes told The Scotsman newspaper he was 'disappointed' with the instigation of legal proceedings. He stressed that without the injection of cash Dobbies would struggle to expand and that the offer would be 'earnings enhancing'.

However, Hunter's West Coast Capital is less than amused and contends that there are no earnings to be tendered.

A spokesman told The Guardian: "It doesn't take a genius to see who is benefiting from this. Dobbies wants to raise more than its current market capitalisation and they have cancelled their dividend. They say it will be earnings enhancing. Well, for who? They don't pay a dividend."

The case will be heard in Edinburgh on Monday.

Comments


(Your email address will not be published)
5 + 6 =  
Already Registered?
Sign In
Not Yet Registered?
Register
Printable View E-mail Bookmark
*

Latest reader comments

re: Latest update on Green Homes Grant and implications for homeowners and landlords

John Hart
After applying for a green homes how long will it take for a decision? thanks...

re: SX Rainproof Exterior Caulk

Wally
I need the exterior sx rain resistant caulk! Can't get it anywhere so please help! How can I order it? Need it yesterday...

re: BCT can replicate any material in a ceramic tile

Christina Tiritanou
Not sure if you can help as I require a tile which has the measurements of 6”x 6”? Thank you....

re: Latest update on Green Homes Grant and implications for homeowners and landlords

colin thompson
SarahVery clear and helpful information.Thanks...

Most read stories