Dobbies, which Tesco took a controlling stake in last year, plans a rights issue which, along with a dividend cut, West Coast argues is not in the interests of minority shareholders.
Unless West Coast takes up the offer of six new shares for every five shares held at£12, its holding would be diluted and Dobbies could be delisted from AIM.
Instead, West Coast believes Tesco should buy its 29.9 per cent holding at “fair value”.
In its petition to the Edinburgh Court, West Coast said that Tesco finance director Andrew Higginson had offered it£15 per share for its holding, if it would also sell 31 of its Wyevale stores for£175 million. Otherwise, it was claimed, the price would remain at£12 per share.
In its response, Tesco said that Dobbies needed the extra cash a rights issue would provide and that a dividend policy is “never fixed indefinitely”.
A decision could be reached by the end of this week.
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