Partco agrees to Unipart's pounds 179m cash bid
The privately owned group is bidding 245p for every Partco share, a 36 per cent premium to the price of the shares on Tuesday, before Partco announced it was in talks.
The agreed deal, which comes hot on the heels of Ford's pounds 1bn agreed offer for Kwik-Fit three weeks ago, underlines the consolidation of the car market and associated industries. Philip Wragg, chief executive of Partco, said: "The market is changing rapidly and there is a lot of reorganisation going on. We could have carried on growing as an independent group. But it is a matter of the strength of the business and how quickly it can grow."
The Ford takeover of Kwik-Fit stepped up pressure on smaller companies to consolidate after other mergers in the car sector, including TRW's purchase of Lucas and Jardine's acquisition of Dagenham Motors.
Unipart, which was the car parts business of Rover Group until it was sold in 1987, is 45 per cent owned by employees and directors, and 36 per cent by institutions. On April 8, it reported a 21 per cent rise in 1998 pre-tax profit to pounds 34.6m. Sales were 2.8 per cent up at pounds 1.11bn.
Last May, Rover said it would not renew Unipart's contract to distribute Rover parts when it expires in 2002. Executives said a 10-year extension of its Jaguar distribution deal would compensate.
Unipart manufactures and distributes parts and accessories for leading car-makers and has also diversified into warehousing and logistics for the health and rail industries. Partco has a network of 500 branches and provides "aftercare" services, including crash repair.
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