Pendragon sells VW dealerships
Added: (Tue Mar 07 2006)
Pressbox (Press Release) -
But supergroup says no more disposals are on the cards after the Reg Vardy takeover
PENDRAGON has sold the five Volkswagen dealerships that became part of the group when it completed its acquisition of Reg Vardy last month.
The outlets in Leicester, Redditch, Stafford, Stourbridge and Wolverhampton were bought by Volkswagen Group UK which immediately transferred ownership of the businesses to three separate dealer operators.
Leicester Volkswagen is now owned by Sean Booth, who already holds the Volkswagen franchise at Parkway Derby and Rees Caddick, the current Volkswagen operator at Lakeside in Stoke, now owns Stafford Volkswagen.
The remaining three sites have been sold on to Andrew Hockeday who becomes a new member of the network. Hockeday was previously employed as a regional manager for Reg Vardy.
The gross assets of the Midlands-based sites amount to £16.8m but in 2005 they contributed a loss of £270,000 to Reg Vardy.
Prior to the purchase of its rival, Pendragon did not hold any VW franchises and chief executive Trevor Finn told Motor Trader that, following the disposal of the Vardy dealerships, "we will continue not to have any.
"It's not a priority from our perspective, "Finn said. He added that the sale of the VW portfolio was" pre-planned" and insisted that no more franchises were set to leave the group - leaving it with a network of about 340 sites.
"You should not anticipate any further disposals," said Finn. Pendragon eventually captured Reg Vardy for £506m in February having valued the company at 900 pence per
share. It had originally offered 800 pence per share but was forced to raise its bid when rival group Lookers entered the fray in the New Year with an offer of 875 pence per share for the north-east-based group.
Despite having been drawn into a bidding war for Vardy Finn was happy with the outcome. "We paid £50m more than we'd have liked but it was still a good deal," he said. The two groups would compliment each other as they have "distinct strengths", Finn claimed.
"Vardy is strong in used, particularly in the volume business, and Pendragon is traditionally strong in new and aftersales," he said.
Having failed in its audacious bid to snatch Reg Vardy from under the nose of Pendragon, Lookers car dealers, ranked eight in the Motor Trader Top 200, has swiftly returned to the acquisition trail by completing the purchase of six Premier Automotive Group franchises in East Anglia from HR Owen.
The £5.4m deal brought two Jaguar dealers, two Land Rover dealers and two Volvo dealerships into the Lookers network. The acquisition was rapidly finalised following the announcement by HR Owen that it had approved the disposal of the territory at an extraordinary general meeting this week. The sites are located in Colchester Ipswich and Bury St Edmunds, adjacent to Lookers' existing PAG territory.
The group said the acquisition would add approximately £55m to its annual turnover (£l.lbn 2004) and was in line with its strategy of expanding market areas with existing manufacturer partners. Lookers now operates nine Land Rover outlets and six Volvo outlets across the UK. The group already runs five Jaguar dealerships in Scotland and Northern Ireland and will now represent the brand in England for the first time.