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Pendragon abandons bid for Pinnacle investment

Pendragon has been forced to abandon a plan to attract an investor to raise the profile of Pinnacle, its division providing back-office software for motor retailers.

The group will make no comment but, according to City sources, chief executive Trevor Finn hoped to make Pinnacle more attractive to potential customers.

“Finn wanted a partial flotation, and hoped to do that on the AIM market,” said a source. “He put out feelers but failed to attract investors, and so had to pull the idea.”

Industry speculation has suggested that Pendragon wanted to sell Pinnacle for a possible £60 million to raise cash in the credit squeeze. The UK’s biggest dealer group has closed dealerships and made staff redundant.

Pendragon has been a major victim in the share price crash and ended 2008 with a stock market value of around £11.5 million. In the volatile market affecting most sectors, Pendragon is now much weaker than the business that paid £500 million to acquire Reg Vardy.

Because of the size of its used car stock, Pendragon took a financial battering as values plunged during the second half of last year. 

Some industry commentators think the group could fare better in 2009.

“There will be a demand for used cars this year and Pendragon can now acquire stock at the new lower prices,” said one.

This year marks the 20th anniversary of Finn’s launch of Pendragon. It became a public limited company when the vehicle division of Williams plc was demerged in 1989.

Finn’s new company started with 19 dealerships representing specialist and luxury franchises and also operated a small contract hire business.

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