UBS sale paves way for delisting of Vardy

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The Independent Online

Pendragon's protracted battle for its smaller rival Reg Vardy finally appeared to nearing the end of the road yesterday after the Swiss investment bank UBS relented and sold its 17.88 per cent stake in the car dealership.

Earlier this week, a Mexican stand-off appeared to be developing between bidder and bank, which felt the 900p per share on offer too mean.

UBS's proprietary trading desk wanted more, and could have derailed plans to delist Vardy had it refused to sell. Pendragon would also have been prevented from stripping out all the costs savings expected from the deal.

Had Pendragon folded and stumped up more for UBS's stake, it would have been forced to make the same offer to all Vardy shareholders, costing as much as £33m extra. However UBS agreed to sell all its Vardy shares - more than 10 million - at 900p, pocketing a healthy profit in the process.

Pendragon controls about 73 per cent of Vardy shares, and expects to have the 75 per cent required to delist the firm by the end of the week. By the end of next week, it expects to breach the 90 per cent necessary to force out the remaining minority shareholders.

Two hedge funds, RAB Capital and Trafalgar Asset Management, are thought still to control 6.5 per cent of Vardy. After the Vardy deal, Pendragon is likely to turn its attention towards another dealership, Lookers.

The Takeover Panel has given Pendragon until 10 March to table a formal offer for Lookers or walk away for six months. Pendragon has approached Lookers about a possible three-way merger with itself and Vardy, but that ambition appears optimistic at the indicated level.

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