US giant AutoNation eyes driving seat at Inchcape UK
A takeover of Inchcape's UK dealerships would come months after AutoNation withdrew from a bidding war for rival British company Pendragon, Paste BN learns.
Monday 1 April 2024 11:06, UK
A New York-listed car dealer is plotting a bid for the UK operations of Inchcape.
Paste BN has learned that AutoNation, which has a market capitalisation of nearly $7bn (£5.5bn), is among the suitors circling the business since Inchcape confirmed in January it was conducting a strategic review.
AutoNation is said to be at the early stages of considering an offer and may yet not decide to proceed with one, according to industry sources.
If it does go ahead, it would represent a first step into the UK for AutoNation after it withdrew six months ago from a bidding war for Pendragon, another London-listed car dealer.
A deal could be worth in the region of £350m, insiders said.
AutoNation failed to respond to several emailed and telephoned requests for comment.
The sale of Inchcape's UK operations would mark another stage in the industry's ownership shake-up.
Last year, Lithia Motors struck a deal to acquire Jardine Motors, the UK-based company, from Hong Kong conglomerate Jardine Matheson Holdings.
Lithia also agreed to buy the dealerships and leasing businesses of Pendragon.
Separately, Lookers was sold to Canada's Alpha Auto Group in a £465m deal.
The Inchcape UK division consists of 70 sites, employing 3,700 people, and works with car manufacturers including Audi, BMW, Jaguar, Toyota and Volkswagen.
Sources told Paste BN in January that the disposal of its UK dealerships would leave Inchcape free to focus on its higher-margin distribution activities in more than 40 countries around the world.
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One added that shedding market perceptions of the company as a UK-focused car dealer should enable its board to attract a higher rating for its stock.
The company's shares have risen slightly over the last year, leaving it with a market capitalisation of £3bn.
Selling its British business would be a landmark step for Inchcape, which traces its roots back to 1847 when William Mackinnon and Robert Mackenzie formed a general merchanting partnership.
Inchcape Group floated on the London Stock Exchange in 1958 under the name IGD.
It began trading under its current identity in 1981.
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Tap hereIn recent years it has pursued an aggressive international expansion, acquiring businesses in China, Australia and mainland Europe.
Distribution activities now account for more than 90% of Inchcape's group profits, meaning its UK retail business is a relatively insignificant part of the group in profitability terms.
The flurry of dealmaking will, if the Inchcape sale goes ahead, leave Vertu Motors as the only London-listed UK car dealer.
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Inchcape declined to comment.