12:39 pm, January 29, 2024
Inchcape confirmed this afternoon that it could sell all its UK dealership sites – but it has tried to play down speculation.
It followed a lunchtime report by Sky News that the global automotive distributor was looking to offload its 70 UK showrooms, which employ some 3,700 people, to focus completely on its distribution business, which is much more lucrative.
According to Sky News, Inchcape was working with Rothschild bankers to woo buyers, with analysts saying the retail division could be worth several hundred million pounds.
The news outlet said that Inchcape, which is listed on the London Stock Exchange, started approaching possible buyers over the past few weeks, with the private and merchant bank hired to oversee talks with them.
In a brief response issued at 3.47pm today, Inchcape said: ‘The board of Inchcape notes the recent press speculation in relation to our UK retail business.
‘Inchcape confirms that following approaches from a number of interested parties it is reviewing strategic options for the UK retail business, which potentially could include a sale.
‘This review is at a very early stage and there can be no certainty that it will result in a transaction.’
If it goes ahead, though, it would follow the sales of Lookers to Global Auto Holdings and Pendragon to Lithia.
Inchcape represents brands such as Jaguar, Toyota, Volkswagen, Audi and BMW. But selling its showrooms would mean it could focus completely on its distribution activities that cover over 40 countries and offer a higher margin.
Its distribution work now brings in more than 90% of the group profits.
David Kendrick, chief executive and corporate finance partner of chartered accountants UHY Hacker Young, told Car Dealer: ‘This is another significant move and maybe not unsurprising, having seen Inchcape sell off sites over the last few years.
‘The question now is who looks to acquire the sites? My guess is it would be the ideal group for a new international entrant.’
Inchcape’s UK chief executive is Duncan Tait, who last week admitted being the top Fujitsu exec who compared the faulty Horizon computer system with Fort Knox during a conversation with Post Office bosses.
Its share price rose by 2.53p this afternoon to 686.03p per share after the response was issued.
This story was first published at 12.39pm on January 29 and updated at 4.05pm the same day with the announcement from Inchcape.
