Car dealer Pendragon returns from takeover talks

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endragon, the owner of the Evans Halshaw and Car Store brands, has said it is no longer in talks with an undisclosed potential candidate after one of its existing shareholders declined to accept the offer.

The company said the bid, from a “major international company”, fell through after one of the top five investors declined to participate in talks, which were supported by the other four. The bidder’s offer, priced at 29 pence per share, would have valued the company at around £460 million, according to Reuters news agency. It depended on the support of all major shareholders.

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Sky News reported in March that Hedin Group, the largest shareholder of the used car dealer, had an approach to buy the entire company, which was rejected.

Demand for used cars has remained strong after the end of the Covid lockdown restrictions boosted pent-up demand in the sector and the prospect of stricter restrictions on the environmental performance of new vehicles is boosting the second-hand market. Nevertheless, trade is under pressure from the cost of living crisis and rising inflation.

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According to Auto Trader, the industry magazine, the average price of a used car was over £17,000 in July, a year-over-year increase of nearly 20%.

Pendragon said its “market-leading position” means it continues to believe it “can capitalize on growth opportunities and deal with short-term headwinds.” It forecasts underlying profit before tax of approximately £33 million for the first half of the financial year.

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The stock rose more than 11% to 24 pence in London on Friday.

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