The two venture capitalists, which jointly hold a 37.7 per cent stake in NARS, bid 79p per share in cash, valuing the company at £21m, after stating a lack of faith in the Nationwide board.
Adrian Dunleavy, the NARS chief executive who joined in October, says that after taking into account the book value of Nationwide's non-core assets, the offer “implies a price for the core business of just 10.5p per share”. He claims GPG and JO Hambro failed to understand the accident repair market, which is forecast to increase in value by 29 per cent over the next four years with a drop in bodyshop numbers. The NARS chain currently stands at 65 outlets.
“I have undertaken an operational review of the business and met shareholders to outline my plans, but GPG and JO declined to have a meeting,” Dunleavy says. He does not rule out recommending a future offer that values the company nearer its true worth, but adds: “We were not considering selling the business when the bid was made - we were getting to a position where we could improve share-holders' returns. This is an easy offer to reject, because it is so low.”
Dunleavy is confident NARS could be achieving a return on capital employed of 22 per cent - the current return is 10 per cent. “Our strategy is clear - to drive value from being the UK's largest repair business and with the aggressive development of our accident management division,” he adds. GPG and JO Hambro were expected this week to issue a statement outlining the response by other shareholders to the offer.