Could Pendragon (PDG) be the next quoted car retailer to be taken over, following on from Marshall Motor (MMH:AIM) and Cambria Automobiles?

Shares in the firm behind the CarStore, Evans Halshaw and Stratstone brands have revved up from 19.65p to 28p since 8 March, more than 40%, on rumours it recently spurned a £400 million takeover bid from Swedish car retailer and 26.1% shareholder Hedin.

The auto retail sector is seeing corporate activity aplenty at present. At the height of the pandemic, Pendragon held merger talks with rival player Lookers (LOOK), while Marshall Motor has agreed to a takeover by Cinch-to-Webuyanycar owner Constellation Automotive, which has also taken a 19.9% stake in Lookers.

Cambria Automobiles was taken private by boss Mark Lavery in a management buyout last year.

Steered by CEO Bill Berman, Pendragon’s 2021 full year results showed the auto dealership posting record underlying pre-tax profit of £83 million as vehicle supply disruption boosted car prices and the Nottingham-headquartered retailer benefited from the lifting of Covid restrictions.

However, Berman warned he expects ‘existing supply chain constraints to continue in the current year’ and is also ‘mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine.’

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