Pendragon in £422m move for Reg Vardy

Click to follow
The Independent Online

Pendragon motored towards its second big takeover in as many years yesterday with a £422m approach to the rival car dealership Reg Vardy.

The Nottingham-based Pendragon has fixed its sights on Vardy after its £230m acquisition of CD Bramall last year shielded it against a slowdown across the industry.

The City liked this latest approach, with bigger car dealerships seen as more likely to maintain growth in a tough market. Pendragon shares rose 45p to 467.75p, while the Sunderland-based Vardy cruised 68p higher to 730p.

Vardy had not expected the approach but confirmed it was now in talks with Pendragon that could lead to offer as high as 750p a share. Vardy said: "Discussions between the parties are taking place but there can be no certainty that an offer will be forthcoming or the other terms of any offer, if made."

Pendragon is the country's largest forecourt operator with 236 franchises. It has more modest operations in the US and Germany.

The group recorded pre-tax profits this year of £36.8m, selling Aston Martins, Ferraris, Land Rovers, Fiats, Citroens and BMWs. It is also the biggest seller of Harley Davidson motorbikes outside the US and the only distributor of Cadillacs in Britain.

Vardy is much smaller, with about 100 outlets. Profits were £43.8m on the back of healthy sales of new and second-hand cars.

In August, Pendragon signalled its intent to snap up smaller rivals as it shrugged off a difficult domestic market to report a decent set of half-year results. They came in spite of the collapse of MG Rover in April, which made a £2.9m hole in the company's accounts.