Sir Tom Hunter, Scotland's wealthiest entrepreneur, today conceded defeat to Tesco in the year-long, £124 million battle over Dobbies Garden Centres.

Hunter's West Coast Capital accepted an offer of 1200p a share for its 29.2% stake in the garden centres chain. Less than a year ago, Tesco paid 1500p a share for its 65.5% stake when Hunter refused its original takeover offer.

The compromise was reached after Hunter failed last week in his legal action to prevent Dobbies launching a £150 million open offer of new shares, which was being backed by Tesco. Hunter would have had to pay another £44 million to prevent his stake being severely diluted. He had sought to block the share issue, claiming that it was being used to give Tesco creeping control of the business.

That issue was postponed at today's annual meeting of Dobbies shareholders. It is unlikely to proceed, given that Tesco will end up with 94.7% of the equity once it receives Hunter's shares. Shareholders, many of whom had already written their cheques for the share issue, now have amonth to withdraw their applications for new shares.

Dobbies chairman Lucy Neville-Rolfe told shareholders that bad weather in March and April compared with the previous year's blazing sunshine in the same months meant that same-store sales fell 6.8% in the six months to the end of April. But recent much-improved weather has seen like-for-like sales race ahead by 16%

Although Hunter is accepting a bid 300p lower than last year's, meaning he loses out on some £9 million, he is not out of pocket, having built up much of his initial stake at less than 800p a share. He also owns Dobbies' much larger rival, Wyevale Garden Centres and Blooms of Bressingham.

Tesco intends to keep the Dobbies brand and push it into selling green products such as solar panels, wind turbines and water butts. The rollout of its Dobbies' Garden World stores, which is due to begin this summer, is seen as a major challenge to existing DIY shed chains such as Homebase and B&Q.