09 Jun 2008
Publication of Supplementary Prospectus
The following Supplementary Prospectus has been approved by the UK Listing Authority:
SUPPLEMENTARY PROSPECTUS 2008: 04 DATED 6 June 2008
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice as soon as possible from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser duly authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares, please send this document together with the Form of Proxy at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom or by whom the sale or transfer was made, for delivery to the purchaser(s) or transferee(s) of such Existing Ordinary Shares.
The distribution of this document and/or the transfer of Open Offer Entitlements in jurisdictions other than the United Kingdom, including the Excluded Territories, may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with any of these restrictions may constitute a violation of the securities law of any such jurisdiction. In particular, such documents should not be distributed, forwarded or transmitted in or into the United States.
DOBBIES GARDEN CENTRES PLC
(incorporated and registered in Scotland with registered no. SC010975)
Open Offer of up to 12,446,208 New Ordinary Shares at £12 per share
This fourth supplement (the 'Fourth Supplement') to the supplement (the 'Third Supplement') dated 23 May 2008, the supplement (the 'Second Supplement') dated 16 May 2008, the supplement (the 'First Supplement') dated 14 May 2008 and the prospectus (the 'Prospectus') dated 9 April 2008, constitutes a supplementary prospectus for the purposes of Section 87G of FSMA. Terms defined in the Prospectus have the same meaning when used in this Fourth Supplement.
This Fourth Supplement is supplemental to, and should be read in conjunction with, the Third Supplement, the Second Supplement, the First Supplement and the Prospectus. In particular your attention is drawn to the Risk Factors set out in Part 2 of the Prospectus and the additional Risk Factor set out within this Fourth Supplement.
Responsibility
The Company and each of the Directors, whose names and functions appear in paragraph 8.1 of Part 9 of the Prospectus, accept responsibility for the information contained in this Fourth Supplement, and declare that, having taken all reasonable care to ensure that such is the case, the information contained in this Fourth Supplement is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import.
Purpose
The purpose of this Fourth Supplement is to amend a statement made in paragraph 21.3 of Part 9 of the Prospectus (as subsequently amended by the Third Supplement) following the announcement made on 3 June 2008 that the Independent Directors of the Company are recommending that Shareholders accept the cash offer made by Tesco Holdings Limited ('Tesco Holdings') to purchase the shares in Dobbies not already held by Tesco Holdings for 1,200 pence per share (the 'Cash Offer').
In addition, the purpose of this Fourth Supplement is to add a further Risk Factor to those Risk Factors set out in Part 2 of the Prospectus following the announcement made on 5 June 2008 that Tesco Holdings has received a valid acceptance of the Cash Offer from West Coast Capital (Lios) Limited ('West Coast Capital') in respect of 3,024,255 Dobbies Shares, representing approximately 85 per cent. of the Dobbies Shares to which the Cash Offer relates, and that the Cash Offer has been declared unconditional in all respects.
Details of amendment
Takeover bids
Paragraph 21.3 of Part 9 of the Prospectus contains information on any takeover bids Dobbies has been party to.
On 21 May 2008, Tesco Holdings announced the terms of a cash offer to be made by Tesco Holdings for the shares in Dobbies not already held by or on behalf of Tesco Holdings at a price of 1,200 pence per Ordinary Share.
On 3 June 2008, the Company announced that the Independent Directors, who have been so advised by Brewin Dolphin, consider the terms of the Cash Offer to be fair and reasonable and, taking into account the circumstances of the Cash Offer, the Independent Directors unanimously recommend Dobbies Shareholders to accept the Cash Offer. In providing its advice, Brewin Dolphin has taken into account the commercial assessments of the Independent Directors.
The Cash Offer by Tesco Holdings represents an enterprise value which is a multiple of approximately 17.7 times Dobbies' adjusted EBITDA for the 12 months ended 31 October 2007. The Cash Offer also represents a price to earnings ratio of approximately 30 times Dobbies' adjusted diluted earnings per share. Both of these ratios are at a significant premium to the average valuation at which small cap retailers currently trade and against the background of volatile debt and equity markets and an uncertain outlook for consumer spending the Independent Directors view the Cash Offer as extremely attractive. It should also be noted that since Tesco Holdings acquired a majority shareholding in Dobbies in September 2007, the FTSE All-Share General Retailers Index has fallen by approximately 27 per cent.
On 3 June 2008, Tesco Holdings announced that the offer documentation in relation to the Cash Offer (the 'Offer Document') had been posted to Dobbies shareholders. Tesco Holdings has received an irrevocable undertaking to accept (or procure the acceptance of) the Cash Offer from West Coast Capital, the holder of 3,024,255 Dobbies Shares, being approximately 29.2 per cent. of Dobbies' issued share capital.
On 5 June 2008, Tesco Holdings announced that on 4 June 2008 it had received a valid acceptance of the Cash Offer from West Coast Capital in respect of 3,024,255 Dobbies Shares, representing approximately 85 per cent. of the Dobbies Shares to which the Cash Offer relates and that the Cash Offer had been declared unconditional in all respects. The Offer, which remains subject to the terms set out in the Offer Document, will remain open until 1 p.m. (London time) on 24 June 2008.
Following the acceptances received on 4 June 2008 Tesco Holdings beneficially owns approximately 94.7 per cent. of the existing issued share capital of Dobbies.
On 5 June 2008, the Company announced that it expects that cancellation of admission of Dobbies Ordinary Shares to trading on the AIM Market of the London Stock Exchange will occur on 3 July 2008 at 7.00 a.m. Cancellation would be likely to reduce significantly the liquidity and marketability of any Dobbies shares which are retained by Shareholders following the Cash Offer.
Risk Factors
Part 2 of the Prospectus contains specific factors and risks associated with the Open Offer. Following the Tesco Holdings announcement on 5 June 2008 a further risk factor has been added to those set out within the Prospectus.
Cash Offer
If Tesco Holdings receives valid acceptances of the Cash Offer in respect of 90 per cent. or more of the Dobbies Shares to which the Cash Offer relates and Tesco Holdings commences the compulsorily acquisition of the Dobbies Shares for which it has not received valid acceptances under the Cash Offer prior to 10.00 a.m. on 26 June 2008 (being the time fixed for the adjourned AGM) then, under these circumstances, the Directors anticipate that the Open Offer will not proceed and that cheques will be returned to all applicants.
Withdrawal rights
Since the Tesco Holdings announcement was released on 21 May 2008, Dobbies adjourned the AGM (held on 21 May 2008 at 10.00 am) where Resolution 8 would have been put to a vote of Shareholders, until 26 June 2008 at 10.00 am, so that Shareholders have the opportunity to take into account the Cash Offer in considering how to exercise their votes on Resolution 8. The Board has also decided to extend the period for Qualifying Shareholders to exercise their withdrawal rights until 5.00 pm on Wednesday 25 June 2008, and to extend the deadline for Admission (referred to in paragraph 2 of Part 5 of the Prospectus) to 8.00 am on Friday 27 June 2008.
Paragraph 3(iii) of Part 5 of the Prospectus contains disclosure on withdrawal rights. The Third Supplement amended Shareholders' withdrawal rights by offering additional time to Shareholders to withdraw. Qualifying Shareholders now have until 5.00 pm on Wednesday 25 June 2008 to lodge a written notice of withdrawal.
'(iii) Withdrawal rights - as revised by the Third Supplement
Qualifying Shareholders wishing to exercise statutory withdrawal rights after publication by the Company of a prospectus supplementing this document must do so by lodging a written notice of withdrawal, which must include the holder reference number, full name and address of the person wishing to exercise statutory withdrawal rights and, if such person is a CREST member, the participant ID and the member account ID of such CREST member, by facsimile to Equiniti Limited (for further details Shareholders should contact Equiniti on 0871 384 2050 or if calling from outside the UK telephone +44 121 415 0259), so as to be received no later than 5.00 pm on Wednesday 25 June 2008. Notice of withdrawal given by any other means or which is deposited with or received by Equiniti after expiry of such period will not constitute a valid withdrawal, provided that the Company will not permit the exercise of withdrawal rights after payment by the relevant Qualifying Shareholder of its subscription in full and the allotment of New Ordinary Shares to such Qualifying Shareholder becoming unconditional. In such event Shareholders are advised to seek independent legal advice.'
A notice of withdrawal was enclosed with the Third Supplement. If any Qualifying Shareholder who has already applied under the Open Offer wishes to exercise withdrawal rights then the notice of withdrawal should be completed and returned to Equiniti Limited by facsimile (01903 702 514).
The Open Offer is closed to acceptances.
Summary
Included within the Prospectus is a Summary which should be read as an introduction to the Prospectus. As a result of certain amendments described above the Company is required to produce a supplement to the Summary of the Prospectus. This is set out below:
Background to the Open Offer
In the Summary the Company reviewed the significant corporate changes that occurred in 2007 and stated that Tesco had acquired 65.5 per cent. of Dobbies' equity.
On 21 May 2008 the Company notified Shareholders that Tesco Holdings had, earlier that day, announced a cash offer to acquire the whole of the issued share capital of the Company, not already held by Tesco Holdings, at a price of 1,200p per share.
On 3 June 2008 the Company notified Shareholders that Tesco Holdings had sent the offer documentation in relation to the Cash Offer to Dobbies shareholders and contained within that documentation was a recommendation by the Independent Directors that Dobbies Shareholders accept the Cash Offer.
On 5 June 2008 the Company notified Shareholders that the Cash Offer to Dobbies shareholders had been declared unconditional and that the Company expects that cancellation of admission of Dobbies Ordinary Shares to trading on the AIM Market of the London Stock Exchange will occur on 3 July 2008 at 7.00 a.m.
Summary of risk factors
In the Summary the Company listed the risks relating to the Company. As a result of further disclosure made in this Fourth Supplement a further risk factor is considered:
• Cash Offer
To the extent that there is any inconsistency between (a) any statement in this Fourth Supplement, (b) any statement in the Third Supplement, (c) any statement in the Second Supplement, (d) any statement in the First Supplement and (e) any other statement in the Prospectus, the statements in (a) above will prevail.
Save as disclosed in this Fourth Supplement there has been no other significant new factor, material mistake or inaccuracy relating to information included in the Prospectus since publication of the Prospectus.
The Supplementary Prospectus may also be viewed on the Company's website: www.dobbies.com
Enquiries:
James Barnes, Chief Executive
Sharon Brown, Finance Director
Dobbies Garden Centres plc
Tel: 0131 663 6778
Sandy Fraser
Brewin Dolphin Limited (Nomad)
Tel: 0131 529 0272
Ben Woodford / Emma Kent / Antonia Coad
Bell Pottinger Corporate & Financial
Tel: 020 7861 3232
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