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Pendragon/Reg Vardy rumour mill in full swing

Rumours have begun circulating that the proposed takeover of Reg Vardy plc by Pendragon plc has already been agreed.

However, AM has yet to hear official confirmation from either dealer group.

Yesterday’s Sunday Telegraph reported claims that the two major motor retailers have already agreed terms and that the recommended offer of 750p per share would be made by Pendragon early this week.

Telegraph journalist Edward Simpkins quoted a source, reportedly close to the negotiations, as saying: “It’s a done deal.” He claimed both dealer groups had planned to announce the news in December, but a steep rise in Vardy’s share price forced it to reveal the talks to the stock exchange last Wednesday.

The offer values Vardy group at £422m, and would put £118m into the pockets of chief executive Sir Peter Vardy and his family, who together own a 28% share of the company.

One analyst told AM that this is a good opportunity for Sir Peter Vardy to exit motor retailing.

However, he said, the chief executive could re-enter the market with a new business, echoing the strategy of former CD Bramall boss Tony Bramall. He sold out to Pendragon for £230m in 2004 but has since formed a small dealer group, Bramall & Jones, with Audi franchises.

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