Country Gardens succumbs to £111m offer from Wyevale

Click to follow
The Independent Online

Country Gardens, the second-biggest garden centre group, has finally agreed to a takeover by Wyevale Garden Centres, saying yesterday that it will recommend the latest offer of £111m.

Country Gardens, the second-biggest garden centre group, has finally agreed to a takeover by Wyevale Garden Centres, saying yesterday that it will recommend the latest offer of £111m.

The shares-and-cash offer values Country Gardens at 400p a share. It comes after Wyevale, the UK's biggest operator, was forced to raise the price four times from an initial offer of 310p in April.

Shares in Country Gardens, which came under fire from some shareholders for not accepting Wyevale's earlier offer of 350p, jumped 79p to 378p. Wyevale shares fell 28.5p to 482p.

As a result of the deal, Country Gardens' board will resign and most of its 40 head office staff will lose their jobs. Nicholas Marshall, the chief executive who founded Country Gardens 12 years ago and is likely to receive a pay-off of about £350,000, and will gain £522,000 from selling his shares.

Mr Marshall said he planned to start all over again: "I started Country Gardens up from a company worth £2 and now I will start up a new group of garden centres." He is looking for investment for the venture.

Wyevale said yesterday that the merged group, which will consist of 119 centres, should achieve £1.5m in administrative savings and "significantly" increase earnings.

Stephen Murfin, finance director of Wyevale, said yesterday's offer - at the top end of what analysts said was an acceptable price for Country Gardens - was not too high. "We are very confident we can make this work and create good value for both lots of shareholders by increasing Country Gardens' margins to a similar level to ours," Mr Murfin said.

Wyevale generated sales of £1.2m last year on margins of 16 per cent. Country Gardens saw sales of £1.76m on margins of 10.2 per cent.

Comments