Tesco is to take full control of Dobbies Garden Centres after pushing through a deal to buy the 29.2% stake of garden sector rival Sir Tom Hunter, at a price that has cost Scotland's highest-profile investor more than £9m on what he could have picked up nine months ago.

Some 300 small shareholders are now being offered 1200p a share by Tesco, well adrift of the 1500p at which Tesco secured a controlling 53% of the shares last September.

On the potential threat to Dobbies' Scottish identity, the UK's biggest retailer, said: "It continues to be Tesco Holdings intention to retain Dobbies head office in Midlothian and its unique brand, heritage and culture under the Tesco Group umbrella."

The settlement came on the eve of yesterday's annual meeting called to wave through a £150m rights issue for the company currently valued at £124m, an issue which Hunter had tried unsuccessfully to block in the Court of Session to avoid writing Tesco a cheque for £44m to maintain the strength of his stake.

Yesterday a spokesman for Hunter would only say: "What could we do with that money? Right now with the credit crunch, there are a whole bunch of opportunities opening up and we can use capital in a more effective manner."

He would not comment on why last August, when Tesco had warned minority shareholders that any subsequent offer for their shares might be lower than the 1500p offer, Hunter's West Coast Capital had said it had "no intention of selling" - which was repeated in court this month.

Analysts have observed that any hopes Hunter might have entertained of working in partnership with Tesco were strained by the scrapping of the dividend and the lack of delivery of any obvious synergies from the deal so far, even before the rights issue.

The new offer was announced to the stock exchange by Tesco less than three hours before the shareholder meeting was due to take place at Dobbies' Midlothian headquarters. It said West Coast had given an irrevocable undertaking to accept the 1200p offer, around the current market price, in respect of its 3,024,255 shares, which meant Tesco would then own around 94.7% of the firm.

It also means that Hunter is walking away with £36.3m for his stake, compared with the £45.4m that he was offered nine months ago.

Tesco said it would cancel Dobbies' market listing, and "seek a recommendation for the offer from the board of Dobbies". The board is chaired by Tesco's appointee Lucy Neville-Rolfe and its two non-executives are Eamonn O'Hare, Tesco's UK finance director, and Jonathan Lloyd, the Tesco company secretary.

Dobbies' board promptly adjourned the vote on the rights issue, which is anyway fully underwritten by Tesco, to give minority shareholders the chance to withdraw applications to take up the rights.

James Barnes, chief executive, commented afterwards: "We have cheques pinned to acceptance forms. It would be completely wrong for us to take the money with the knowledge we now have."

Last week in the Court of Session, Lord Glennie rejected the submission by West Coast that the Dobbies' board had acted prejudicially by instigating the rights issue. He was persuaded by Dobbies argument that it needed the £150m urgently to continue its expansion plans, and concluded that the court "should not be used to further the interest of one or other party in a commercial tussle"

He suggested that the two sides should negotiate a buy-out, and pointed to evidence from both sides that continuing partnership was not viable.

Barnes commented after the meeting: "We have got exponential growth plans in our capital expenditure. The bottom line is everybody knows that we have £108m of debt on our balance sheet against £43m of net assets, and I think it is very difficult for anybody to suggest that we are not a highly-geared business, particularly in this climate."

He added that relations with West Coast had always been "cordial", though he failed to dismiss completely a suggestion that Dobbies might now be interested in making a move on the sector's biggest player Wyevale, where West Coast owns a 40% stake.

Estimates of the average price paid by West Coast for its Dobbies shares vary between 1200p and 1500p, with sources sympathetic to Hunter insisting that there has been little gain or loss, but some analysts calculating that West Coast has actually lost around £9m on the play.

West Coast crossed the 3% threshold two years ago when Dobbies shares were at 725p. It doubled its stake in January 2007 at 1175p a share, but after Tesco's shock 1500p bid was announced in early June, Hunter's vehicle doubled his stake again to 20%, paying 1750p a share.

Meanwhile West Coast had picked up another garden retailer Blooms of Bressingham for £30m. In its final purchases in June last year, West Coast shelled out 1845p a share to take its stake above the 25% mark, amid talk of Tesco's offer being pitched too low. But in early August the shares sank back to 1500p as the Takeover Panel warned West Coast to put up or shut up, and, on August 16, Tesco claimed victory with 53.1% of the shares.