Pendragon's hostile bid for its rival car dealer Lookers appeared to be all but doomed yesterday after a former car dealer, Tony Bramall, snapped up a 24.4 per cent stake in the target company and pledged to vote against the offer.
In an ironic twist, Mr Bramall bought his shareholding in Lookers using some of the proceeds from the £230m sale of his business, CD Bramall, to Pendragon in 2004.
Mr Bramall spent £55m to acquire GE Corporation's 8.77 million Lookers shares at 635p - some 5 per cent below their market price and 8 per cent below the price implied by Pendragon's all-share offer which values Lookers at £246m.
In an attempt to garner enough support for its bid, Pendragon has cut the number of acceptances required to declare the offer unconditional to 50.1 per cent. But analysts said Pendragon now appeared to have little chance of winning the bid battle when the offer closes at lunchtime tomorrow, even though it has got the backing of Schroders and Morley Fund Management, who between them own 12.6 per cent of Lookers.
Pendragon said despite the setback, it was continuing to canvass support among shareholders and remained confident it could get to the 50.1 per cent level. "The sale of GE's stake makes it harder but it is still possible," a spokesman said.
Mr Bramall said: "I regard this as a very good investment for the family in a well-run group where there is substantial scope for growth. Obviously, I will not be accepting the existing Pendragon offer in relation to the above holding."
Lookers, which has dismissed the Pendragon approach for massively undervaluing the company, said Mr Bramall would join its board after the annual shareholders meeting next month.