Sir Tom Hunter's long-running battle with Tesco for control of Dobbies Garden Centres took a new twist yesterday when the Scottish billionaire began legal proceedings to thwart a proposed rights issue that threatens his position.

West Coast Capital, Sir Tom's investment vehicle, has asked a court to block the AIM-listed Dobbies' plan to sell new shares worth £150 million, which could lead to Tesco taking control of the business. The rights issue is being underwritten by the supermarket group, which emerged as Dobbies' largest shareholder with a 65.5 per cent stake after a takeover bid last year.

Tesco's attempt to take control of the business was bitterly opposed by Sir Tom, Dobbies' second-largest shareholder, who also owns Wyevale Garden Centres, its main rival.

Under the terms of the rights issue, Sir Tom would need to spend about £44 million to maintain his 29.2 per cent stake in Dobbies. However, since Tesco is underwriting the deal, it has agreed to buy any shares that are not taken up by other shareholders.

This means that if Sir Tom does not exercise his right to buy his new shares, Tesco will. Such a move would easily take its holding above 75 per cent - a level that would give the supermarket group stronger rights over the business and could allow it to engineer a full takeover.

James Barnes, Dobbies' chief executive, said that he was a little disappointed that Sir Tom had initiated the legal action, which Dobbies has vowed to defend. A preliminary court hearing has been scheduled for Monday.

Dobbies said: “The board hopes for an early resolution in order to allow it to concentrate its energies on running the business to deliver returns to the benefit of all shareholders.”

A spokesman for Sir Tom said: “We do not believe this offer to be in the interests of all shareholders.”

A spokesman for Tesco said: “We are surprised that [Sir Tom's investment vehicle], which says it is committed to long-term growth at Dobbies, should seek to prevent it raising fresh funds.”

The rights issue, announced last month, sparked speculation that it had been engineered to allow Tesco to increase its stake in Dobbies. Mr Barnes dismissed suggestions that the capital-raising was designed to squeeze out Sir Tom, with whom he said the Dobbies board enjoyed a very cordial relationship.

He said that the money was intended to expand Dobbies' existing slate of 24 garden centres and to shore up its balance sheet. He added that he welcomed the presence of minority shareholders - “especially ones with deep pockets”.

Sir Tom is Scotland's richest man, with a fortune estimated at £1.05 billion by the Sunday Times Rich List. The 46-year-old, who started his career selling training shoes from the back of a van, has since expanded into property and retirement homes. His first big break came when he sold his Sports Division retail chain to JJB Sports for £290 million. He went on to buy companies including Wyevale Garden Centres for £311 million and McCarthy & Stone, the retirement homes specialist, for £1.1 billion.

Analysts believe that Dobbies is attractive because the garden centre business is set for high growth and will not be seriously affected by a wider consumer slowdown. The business remains fragmented and dominated by independents, making Dobbies one of only a small number of chains.

It has further acquistion plans after the recent £8 million takeover of Sandyholm garden centre at Crossford, Lanarkshire, last month. In the year to October 31, Dobbies posted a 12 per cent fall in pre-tax profits to £3.8 million, as last summer's poor weather hit the business.

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