Groups bid for £200m Carcraft

Private equity firm NM Rothschild reports strong initial bidding for used car superstore group Carcraft, which was put on the market in December with a £200m price tag.

The decision to sell the company surprised analysts – despite indifferent used car values, Carcraft had continued trading strongly and is expected to return profits of £30m from a £140m turnover for the year to September 2000.

But analysts also predict problems attracting bidders against the used car market background of falling prices and widespread uncertainty.

Carcraft's strength was its financing packages, which enabled customers to spread payments over several years.

They improved conversion rates and generated a high proportion of the group's profits.

The business was bought for £50m by Noel and Darren McKee from their father in 1998. The brothers acquired a Newport outlet for £10m from the Car Group when it collapsed into receivership. The business also has outlets in Rochdale and Sheffield.

The sell-off again raises question marks over the used car superstore concept, following the high profile collapse of Car Group and Maxcars together with Lex Service's Autosales failure.