Country Gardens takeover collapses

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The Independent Online

The turf war to control Britain's garden centres came to a halt yesterday when Wyevale, the market leader, dropped its attempt to buy rival Country Gardens. Its informal approach had valued the company at £97m.

The turf war to control Britain's garden centres came to a halt yesterday when Wyevale, the market leader, dropped its attempt to buy rival Country Gardens. Its informal approach had valued the company at £97m.

However, Wyevale said it will review its decision if there are "material changes" or if a third party moves in on Country Gardens. The company - which had already increased its offer twice, from 310p a share in April to 350p - said the rationale behind the merger remained "irrefutable". Earlier yesterday, Country Gardens had announced it had broken off discussions.

Industry watchers believe that Wyevale, which owns 80 garden centres across the country, will come back with a hostile bid if the Country Gardens share price falls significantly.

Analysts said that a deal between Country Gardens, whose 38 centres are mainly in the South, and Wyevale, which is mainly represented in the North, would produce synergies worth up to £4m. Shares in Country Gardens closed down 6.5p at 273.5p as investors expressed concern that the board had rejected Wyevale's 350p-a-share bid, which represented a premium of 70 per cent on the company's price before the offer was announced in April.

Nicholas Marshall, chief executive of Country Gardens, said: "We sought advice and decided that the offer did not reflect the true value of the company." He was sanguine about Wyevale's threat to come back with a hostile offer, saying "this will underpin our share price".

Country Gardens reported better than expected interim results last week, showing a 26 per cent increase in pre-tax profit to £5.9m, against analysts' expectations of about the same amount for the whole year.

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