The motor dealer Pendragon catapulted itself into pole position as Europe's biggest car retailer yesterday after the £230m takeover of the rival dealership CD Bramall.
The agreed cash offer will net a £75m windfall for Tony Bramall, the chairman of the Harrogate-based car dealer, who set the business up 12 years ago and owns a 33 per cent stake. The takeover will create a group with sales of £3.6bn and 236 outlets, nearly all of them UK-based, selling about 100,000 cars a year ranging from Ford and Vauxhall to Ferrari and Maserati.
Trevor Finn, the chief executive of Pendragon, predicted further consolidation in the UK car retailing market as a result of the dismantling of the European block exemption, which has loosened manufacturers' control over who can sell their cars and where.
"The UK market is still very fragmented with about 6,000 franchised dealerships. I suspect there will be a lot of small private businesses transferring to become part of larger groups," he said.
Pendragon is offering 600p for each CD Bramall share - a 24 per cent premium to its price before it disclosed last week it had received a bid approach but a small discount to yesterday's opening price. CD Bramall shareholders have also been promised a slice of a tax rebate the company is due from Customs & Excise for overpayment of VAT.
Together with three institutional investors and other directors, Pendragon has received irrevocable undertakings from shareholders speaking for 48.8 per cent of the company. CD Bramall has agreed to pay a break fee of up to £1m if it accepts a higher rival offer.
Pendragon will benefit from CD Bramall's focus on a small number of franchises that the two groups have in common, notably Ford, Vauxhall, BMW and Mercedes.Reuse content