Pendragon Share Discussion Threads

[darkinbad] 30/11/2005 08:05

From the Herald
Two more mystery bidders stalk car dealer Vardy

MARK SMITH November 30 2005

MOTOR dealer Reg Vardy yesterday said that two more bidders had emerged following a £422m offer earlier this month from Pendragon, the UK's biggest car dealer.

Vardy, which is the country's second-biggest car dealer, declined to name the source of the bids – although analysts have tipped luxury-car specialist Inchcape and European Motor Holdings, the former Lada specialist.
Arnold Clark, the only Scottish car retailer with a warchest big enough to compete against Pendragon, declined to comment yesterday.
However, an insider ruled the Glasgow-based company out of the bidding for Reg Vardy.

"We're not involved in this," the Arnold Clark insider confirmed.
Nonetheless, Vardy's stock price leapt 6.2%, or 45p, to 780p on news that it had received two new takeover approaches.
Shares in European Motor Holdings climbed 4.3%, or 12p, to 293.5p and Inchcape rose 1%, or 24p, to £24.21.

Sunderland-based Vardy, whose franchises include BMW, Citroen and Fiat, said the approaches were above the 750p-a-share deal being discussed with rival Pendragon.

A company statement said: "Reg Vardy can now confirm that it has received two further unsolicited approaches from potentially interested parties.
"The board intends to continue discussions with all these parties with a view to obtaining the best outcome for the company."

While several analysts yesterday struggled to pin down who the new bidders might be, others settled on Inchcape, which has ventures in UK, Greece, Belgium, Australia, Hong Kong and Singapore, and European Motor Holdings.
Both Inchcape and European Motor Holdings declined to comment.
Peter Whiting, an analyst at UBS, said: "We expect this to support calls from Vardy holders for a higher price."

Meanwhile, a successful bid for Reg Vardy would make it Pendragon's second in as many years, and comes at a time when sales of new cars are declining in the gloomy retail environment.

Pendragon snapped up CD Bramall dealerships in 2003 for £230m.

[darkinbad] 30/11/2005 07:58

From the Telegraph
Two mystery bidders join race for Reg Vardy
By Christopher Hope and Ben Harrington (Filed: 30/11/2005)


A £450m bidding war looks set to break out for Reg Vardy after two more unnamed bidders entered the fray for the car dealer.

Reg Vardy's disclosure to the stock exchange prompted shares to climb 8pc to close at an all-time high of 795p.

Last night Sir Peter Vardy, chairman, whose family controls 28.1pc of the shares, said: "I was approached and Pendragon made a bid and, when we were considering that, something else came up." Asked if he was going to front his own buy-out he said: "No I am not."

Earlier the company said: "Reg Vardy can now confirm it has received two further approaches from potentially interested parties."

The bids were "above the 750p a share" that was tabled by Pendragon, the UK's number one car dealer, earlier this month.

It continued: "The board intends to continue discussions with all these parties with a view to obtaining the best outcome for the company."

Mystery surrounded the identity of the bidders last night. Sir Arnold Clark, chairman of the privately-owned Arnold Clark dealer chain, said he was not interested in making a bid. "We have good relations with them because we are competitors," he said. "But we are not involved."

Inchcape, which operates at the higher end of the car market and is more focused on the international market, declined to comment. However sources close to the company said it had no interest in bidding.

Smaller listed rivals Lookers and European Motor Holdings also declined to comment, but industry sources said a bid from EMH looked unlikely while Lookers might be too small to launch a takeover.

Analysts said the most likely interest would come from private equity bidders or property businesses keen to get hold of the freeholds to Reg Vardy's car dealerships, which have not been valued for years.

Bidders such as private equity houses CVC or Cinven might be interested in bidding in conjunction with a trade operator, which will be needed to persuade the car suppliers not to veto any bid. Analysts also speculated that a bid from United Auto, the US car retailer, was also a possibility.

Under existing industry rules, car makers such as Vauxhall and Ford can put the brake on any offer from a company that does not already own a dealership selling their vehicles.

Until yesterday, analysts were expecting Pendragon, led by acquisitive boss Trevor Finn, to agree terms with Reg Vardy within the next four weeks. A swift conclusion now looks unlikely.

[darkinbad] 30/11/2005 07:54

Vardy in top gear as bid race starts
Robert Lea, Evening Standard
29 November 2005

SHARES in motor dealer Reg Vardy accelerated 36½p to a new high of 771p today after it admitted to getting two offers which could trump a £420m approach from rival Pendragon.

In a bid to create a nationwide £1.1bn industry leader, Pendragon believed it was on the way to agreeing a 750p-a-share takeover of North-East based Vardy.

But today, Vardy, effectively controlled by Sir Peter Vardy, 28% shareholder and son of the founder, said it had received potentially better approaches.

One of those is believed to be from a private-equity firm - CVC is leading industry gossip - backing a management buyout of the company. Another bidder is understood to be a private-equity group teamed with a trade buyer.

Industry sources ruled out rival dealer Inchcape as it is not believed to fit its strategy.

The big private-equity firms have hitherto not been involved in the consolidating car-selling business because, though the firms have strong property assets and regular cashflows they have not been of sufficient size.

[robson1974] 29/11/2005 11:52

maybe has to pay a bit more but still a good deal.

[chester] 21/11/2005 16:12

Loaded up with a few today.....

[darkinbad] 21/11/2005 06:45

From the Telegraph

Pendragon motors ahead with Vardy
By Edward Simpkins (Filed: 20/11/2005)

The terms of a £422m deal to acquire Reg Vardy, one of the UK's biggest car dealerships, have been agreed and a recommended offer for the company at 750p per share is expected to be made within the next few days.

Negotiations between Vardy, which has around 100 dealerships, mainly in the North East, and Pendragon, the UK's largest car retailer, which has 236 outlets, are at a more advanced stage than many investors had realised and a deal could be announced as early as this week.

Vardy was forced to admit it was in talks with Pendragon on Wednesday after its share price began rising. However, its statement said merely that it had received an unsolicited approach and that there was no certainty an offer would be forthcoming. Investors assumed that the approach had just been received and speculated that a further bidder could yet emerge.

In fact, talks have been going on for some time and the price of 750p per share already agreed. "I gather they were pretty far advanced when the announcement went out. The price is agreed and now it is just paperwork. It's a done deal," a person familiar with the discussions said yesterday.

The groups had been planning to announce the deal in early December, but are now rushing to agree outstanding issues.

Analysts have applauded the logic of the merger, saying that putting the UK's largest and second-largest dealer networks together makes commercial sense.

[darkinbad] 17/11/2005 08:56

The Telegraph,

Shares go va va voom on Vardy merger approach
By Alistair Osborne, Business Editor (Filed: 17/11/2005)

Britain's two biggest car dealership groups are in advanced talks for a potential £1billion merger which could net the family of Sir Peter Vardy more than £118m.

Sir Peter is chief executive of Reg Vardy, which yesterday admitted it had received "an unsolicited approach" from market leader Pendragon that could lead to a cash takeover at 750p-a-share.

It would value Vardy's equity at £422m.The news was warmly greeted by the market, which pushed Vardy shares up 68 to an all-time high of 730p and also drove Pendragon 45 higher to 467¾p, where it has a market value of £614m.

Talks, which began about a fortnight ago, are said to be progressing well, with a potential deal said to be "weeks, but not days, away".

Sir Peter, whose family owns 28.1pc of the stock, is the son of the company's late founder Reg Vardy, who started out in 1923, aged 14, with a horse and cart delivering coal in Houghton le Spring, Tyne and Wear. From there he developed a road haulage business, branching out into selling cars in the 1950s.

Reg Vardy died in 1976 and Sir Peter subsequently took over. Today the company has around 100 car dealerships, including prestige marques such as Aston Martin and Ferrari, selling 200,000 vehicles a year and employing about 6,000 staff. It is unclear whether Sir Peter would sell out completely.

Any merged group would be run by Pendragon's acquisitive boss Trevor Finn, who last year purchased smaller rival CD Bramall for £230m. Only in August Mr Finn said that, in a sluggish car market, there were "more opportunities than ever", for buying smaller rivals.

Rob Brent, an analyst at Peel Hunt, said: "I thought Pendragon could have paid up to 800p so it's a good price for them. There's also a good geographical fit."

Vardy's dealerships are mainly in the north east and Scotland, while Pendragon's 250 are in the north west, Midlands and southern England. The pair would have about 5pc of Britain's new car market, so there are unlikely to be competition issues.

[darkinbad] 17/11/2005 08:55

From the Independent

Pendragon in £422m move for Reg Vardy
By Gary Parkinson
Published: 17 November 2005

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.

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.

[diogenesj] 16/11/2005 23:36

And even quite dim ones, R, if they took the trouble to read the RNS posted just above by Darkinbad. :-)

[robson1974] 16/11/2005 14:37

there must be something big going on which clever investors have noticed?

[darkinbad] 16/11/2005 13:48

Reg Vardy confirms approach from Pendragon on possible 750p/share offer

LONDON (AFX) - Car retailer Reg Vardy PLC confirmed that it has received an
unsolicited approached from rival Pendragon PLC that could lead to a cash offer
for Vardy worth 750 pence a share.
Vardy said talks between the companies are taking place but added that there
can be no certainty that an offer will be forthcoming.
Vardy said its statement was made with the approval of Pendragon.
At 1.20 pm, Reg Vardy shares were up 58 pence at 720, while Pendragon was
1/4 higher at 423.
[e-mail]
ak/

[noirua] 15/11/2005 10:41

Closed at A$27.62 on the ASX.

[noirua] 14/11/2005 00:41

Placer Dome are in a takeover struggle, at present, with Barrick Gold.

Placer shares were suspended at the opening on the ASX this morning. More information is expected when markets open in Canada and America.

[robson1974] 08/11/2005 13:47

all these car dealers look to have broken out to the upside.

retailers of consumer durables doing well in this environment!!

there must be something big going on which clever investors have noticed?

[cockneyrebel] 04/11/2005 07:40

Great trading statement from VDY - follow through here today?

Sector might come in play perhaps

CR

[darkinbad] 07/10/2005 10:07

Through the 20 day MA, 50 day MA currently at 370 and rising steeply.

Intraday bounce off low from early Sept of 375 yesterday so looks like support is currently 375. If this breaks would expect next support to be 355/360 (38.2% Fib retracement and mid-August consolidation). Right shoulder of small H&S may be forming, target 360.

[mickconn11] 05/10/2005 21:25

Parabolic.

[darkinbad] 26/9/2005 18:46

Nice failure of the double top with a triple top breakout on 19th and a sizeable intraday up move on the 20th. Still short though as bearish divergence has strengthened on RSI(14),MACD and OBV. We dropped through the floor of the rising uptrend from the 11 Aug today after touching the ceiling on the 20th, which could signal a shallower rising trend, flat period or possible start of a downtrend. We're close to the 15 day MA, which appears to have provided some support during the recent rise so would like to see a break of this and the 20 day MA before adding to the short. There does appear to be a gap to fill at about 430 from July 2003 so there may still be a little upside. We also have a gap at 303 to fill from 04 Aug.

Robson,

An interesting comparison with VDY. My limited knowledge of the motor trade lead me to believe that VDY is a well respected operation and is considered a different operation to PDG. This may have course changed but it is worthwhile looking at some comparisons as the market would appear to value PDG more highly at the moment:

VDY PDG
PE 9.93 10.86
Yld 3.08 2.62
MBV 1.56 2.85

But with some less attractive financial ratios:

VDY PDG
Gross Gearing 63% 85%
Net Gearing 56% 76%
Operatg margin 2.6% 2.0%

All from ADVFN Finacials so some are no doubt open to debate.


Also of note is that institutions may have started to offload motor trade stock. Deutsche Bank confirmed on 22 Sept that it no longer had a notifiable interest in VDY.

VDY, in its AGM statement on 21 Sep said "Since July, when we reported our preliminary results for the year to 30 April 2005, retail consumer demand in the United Kingdom for new vehicles has remained subdued. As predicted, across the industry, sales of new vehicles to private buyers in September, a month of registration number change, are anticipated to be below September 2004 levels."

Time will tell but I think we may be close to the top.

[robson1974] 23/9/2005 12:37

Thanks for that.

From the website :-

CV registrations on target for record year

Registrations total 395,073 at rolling year to August
August registrations up 4.5 per cent and year-to-date up by 2.1 per cent
2005's trucks growth trend remains firm



'Commercial vehicle registrations are breaking rolling year records,' said Christopher Macgowan, SMMT chief executive. 'Though fortunes are mixed across the sectors, 2005 is likely to set a new annual record. Truck registrations continue to see strong, stable growth and as some firms are already talking about delivery next year for sales made now, the registration outlook is positive.'

[mickconn11] 22/9/2005 20:11

MAybe. Time will tell. Worth looking at the smmt site.

Staying short.

[robson1974] 22/9/2005 12:58

all these big car dealers are buys you chart monkey! check out vdy

[mickconn11] 20/9/2005 18:10

Naughty candle and could well signal a top. Let's see what the next few days bring.

Anyway food sales are down. I don't think everyone is going out and buying cars.

[robson1974] 19/9/2005 18:01

There goes your 'double top' i think it is now a 'huge breakout'. Get that short covered!