West Coast Capital leads bid for Wyevale

The UK garden centre business has received a 555p per share bid from a consortium led by Sir Tom Hunter’s West Coast Capital and Icelandic investment company Baugur.

A consortium led by West Coast Capital, a UK private equity firm focused on retail, brands and property, and Iceland’s Baugur Group, has made a 555 pence per share offer for Wyevale Garden Centres, valuing the existing issued share capital of the business at £310.9 million (€449 million; $553.5 million).
 
The consortium, which comprises retail entrepreneur Sir Tom Hunter’s West Coast Capital, Baugur Group, HBOS and property investment companies Presbury and LxB SmallCo, made its bid through acquisition vehicle WCC Hortis. The bid requires the majority approval of at least 75 percent of shareholders.
 
Senior bridging, capital expenditure and working capital facilities have been arranged and underwritten by Bank of Scotland.
 
The offer follows West Coast Capital’s acquisition of a 13.8 percent stake for £46.6 million in February of this year, also through a 555 pence per share offer by WCC Hortis.
 
If the bid is successful, WCC Hortis will hold 16,064,148 Wyevale shares, representing approximately 28.68 percent of the existing issued share capital of the business.
 
According to a regulatory announcement by Wyevale, the offer represents a premium of 11.1 percent to the closing price of 499.5 pence per Wyevale share on 16 January, the last business day prior to the commencement of the offer period; and 11 percent to the average closing price of 500.07 pence for the three months prior to the offer period.
 
Both offers are lower than the 580 pence per share offer from Gnome Acquisitions, a bid vehicle established by global private equity firm Cinven, last October. The bid was later withdrawn and discussions were terminated.
 
Wyevale said West Coast Capital and Baugur Group’s experience in the UK retail sector would help to build on current operations and improve efficiencies and levels of service, following a “turbulent time over the previous 12 months”.
 
Hereford-based Wyevale reported turnover of £187.6 million and net assets of £126.6 million, compared to 2004 figures of £192.5 million and £134.3 million, respectively. Wyevale said trading in 2006 has remained tough, with sales down by 14.6 percent for the first 15 weeks of the year.