Takeover snub revs up shares in Pendragon
SHARES in Pendragon jumped after the car dealer revealed it approved a takeover offer but talks ended as a major shareholder didn’t engage.
The takeover offer from an unnamed bidder was 29p per share, representing a 35pc premium to Thursday’s closing price.
But the offer was contingent on support from the company’s top five shareholders and only four backed the deal.
Pendragon said the bid needed ‘commitments from all of Pendragon’s major shareholders’.
The latest bid for Pendragon comes five months after the company’s shareholder Anders Hedin, boss of Swedish car retailer Hedin Group, tabled a bid which was rejected by the Pendragon board.
One broker said: ‘I suspect Hedin blocked this latest takeover bid for Pendragon.’
Pendragon’s other four largest shareholders are Schroders, Odey, Briarwood Chase and Hosking Partners. Together with Hedin they have a combined stake of 64.78pc. News of the takeover comes two years after talks between Pendragon and Lookers about a potential merger stalled, ending a process which would have created the UK’s largest car retail group. Shares jumped 8.4pc, or 1.8p, to 23.3p.
Overall the FTSE 100 fell 0.1pc, or 8.32 points, to 7439.74 while the FTSE 250 retreated 0.5pc, or 104.28 points, to 20,051.48.
The Footsie’s decline would have been greater but for some enthusiasm for miners, particularly copper miner Antofagasta, which was up 3.6pc, or 40.5p, at 1170.5p, as the price of copper rose 2pc.
Housebuilders were off the pace on further signs that the housing market is cooling. As if the Bank of England’s rate hike was not bad enough, the Halifax reported the average UK house price fell by 0.1pc in July.
Taylor Wimpey, down 3.7pc, or 4.7p, at 123.15p, was the hardest hit of the big names in the sector, while Rightmove, the property listings website operator, slid 2.8pc, or 18.6p, to 644.4p.
Tullow Oil reversed earlier losses to finish 3.4pc, or 1.7p higher, at 52.1p, overcoming a disappointing drilling result at the Beebei-Potaro exploration well off the coast of Guyana.
The company has now plugged and abandoned the well.
Meanwhile Capita failed to impress investors as it continues to offload non-core businesses to strengthen its balance sheet.
The company, which is responsible for enforcing BBC TV licences and provides customer support services for Scottish Power, saw profits plunge to just £100,000, from £261m a year earlier.
It put the sharp fall down to weaker-than-expected returns from the sale of some of its businesses. Shares tumbled 8.5pc, or 2.48p, to 26.86p. On the broker front, Barclays downgraded Hikma Pharmaceuticals in the wake of the drugs company’s halfyear report on Thursday.
‘With yet another downward revision to numbers and without a permanent CEO, we think it is difficult to put new money into the name,’ the broker said, as it chopped the target price to 1750p from 2250p previously. Hikma shares trade at 1604.5p, down 2.8pc, or 46p yesterday.
Citigroup reiterated its ‘buy’ recommendation for Serco after the outsourcer’s results this week but much good it did the shares, which fell 4.6pc, or 8.4p, to 174.8p. Citi reckons they are worth 255p and says the market has failed to appreciate the US defence opportunity for the company.
Among the tiddlers, Amur Minerals shot up 43.8pc, or 0.39p, to 1.27p after it found a buyer for its Kun-Manie project in far east Russia. The company has persuaded Bering Metals to buy the project for £29m.