Seasoned motor trade executive Tony Bramall has built up his stake in Lookers further this week – fuelling speculation he may want to take the company private.
Octogenarian Bramall quit the Lookers board as a non-executive director last year and this week increased his stake in the company both personally and through his Guernsey Investments company.
He now owns more than 20 per cent of Lookers.
The news has pushed the share price up 20 per cent this week, trading this morning at 44p, compared to 33p at the end of last week.
Bramall’s share purchase was released in an RNS update to the Stock Market, late on Monday, posted at a time many company’s use to bury news.
Many in the industry think Brammall could be planning a move for Lookers which has been battered by accounting issues, an FCA investigation and internal fraud.
‘You could put two and two together on this one and surmise that Tony is looking to make a move,’ said one city insider.
‘He quit the board last year and he’s obviously not wanting to fade away into the background, increasing his stake yet again. We don’t know if he fell out with the board, but I wouldn’t put it past him to make a takeover bid.’
Mike Jones, ASE Global chairman and compiler of the Car Dealer Top 100 list of most profitable car dealers, said the rationale for Bramall’s share purchase could be ‘a number of things’.
He said: ‘Ever since the fraud, FCA investigation and management turmoil Lookers has been subject to rumoured takeover interest including the public pronouncement from Pendragon.
‘Given his personal and corporate shareholding in practice any move would require Tony Bramall to be on board with it.
‘As we saw in the dealer profitability ratings there is a good business within Lookers when you look through the exceptional adjustments and the recent share acquisitions could be anywhere from the preparation for a corporate transaction to an experienced car retailer spotting an undervalued asset. Time will tell.’
Last year, Pendragon CEO Bill Berman approached Lookers over a proposed merger, but the talks came to nothing. You can see what he said about the move in an interview with Car Dealer above.
Lookers appears to be getting its house in order following a tumultuous year.
It has slashed costs, set aside cash for the FCA fine and dealt with the internal fraud investigation.
Analysts predict it will make a small loss for 2020, but could be on course to make £25m in 2021 and then closer to £40m in 2022.
Bramall was a ‘white knight’ for Lookers in 2006 when a battle over dealer group Reg Vardy with Pendragon, resulted in a takeover bid from Pendragon for them both.
Bramall swept in and bought a large stake in Lookers, blocking the Pendragon attempt and effectively saving the dealer group and keeping it independent.
‘He’s in his 80s now but is incredibly driven,’ said an analyst.
‘Could these two facts – him leaving the board and increasing his stake – be a sign he wants to do things differently to the board? I think they could be.’
City experts told Car Dealer that at £160m ‘Lookers looks cheap’ and an offer of around 80p per share could be a premium that ‘gets the attention of the board’.
Bramall is a veteran of the car industry and has built and sold many dealer groups including one to Pendragon for £240m in 2004.
Lookers has been approached for comment.