By Kristy Dorsey
Car retailer Pendragon has insisted it remains “well-positioned” despite the end of early-stage merger talks with rival dealership Lookers.
Pendragon, which trades under brands such as Evans Halshaw and Stratstone, confirmed it recently held outline discussions with Lookers about a tie-up that would have created the UK’s largest motor group with nearly £10 billion in annual sales. Although Pendragon believed “such an exploration would have proved beneficial, these early discussions have now ceased”.
READ MORE: Car dealer Pendragon warns on losses
“Pendragon remains well-positioned having already taken significant steps to reshape the business and to cut costs both in advance, and as a result of, the recent events which have temporarily curtailed business activity,” the company said in a statement.
“And, as previously announced, Pendragon continues to benefit from the support of its stakeholders during the current disruption.”
Nottingham-headquartered Pendragon has furloughed 80% of its staff for at least three weeks in response to the coronavirus pandemic, but not all of its difficulties stem from the outbreak. In March, the group posted a loss of £117.4 million for 2019 following a restructuring that included the closure or disposal of dozens of franchises.
READ MORE: Car dealer closes sites, cuts dividend
Lookers has its own problems. It is currently being investigated by the Financial Conduct Authority, and announced last month that it will take a £4m charge against its 2019 accounts after uncovering debt and expenses irregularities within one of its operating divisions.
Approximately 7,000 Lookers staff are currently on furlough.
The latest approach by Pendragon follows its £260m bid to buy Lookers in 2006. A majority of Lookers shareholders rejected the all-share offer on the basis that it undervalued the Manchester-based company.
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