Pendragon CEO Bill Berman has revealed the full story behind the group’s merger talks with Lookers – and said he hasn’t ruled out super-sizing the dealer in the future.
In an exclusive interview with Car Dealer Live – a clip of which you can watch above – Berman explains he wrote to the chairman of Lookers, Phil White, to ask for a discussion about a potential merger, but it never took place.
And he has admitted that he thinks the best way for Pendragon – the third biggest group in the UK with a £4.6bn turnover – to thrive is to grow larger so it can enjoy economies of scale.
News of ‘merger talks’ broke earlier this month and on May 5 Pendragon confirmed to the Stock Market it had made an approach to Lookers.
Speaking from his home in Florida, Berman said: ‘That got overplayed just a little bit – the real skin of it was I’m just looking around.
‘Lookers was no real discussion – all I did was send a letter to their chairman and asked if he’d like to have a discussion. I just did it in a formalised manner. And that was it. We never even had the discussion.
‘They said they weren’t in a place to have a discussion and we respected that and moved on and then two weeks later a story broke.
‘But we never had any discussion whatsoever. I think it was overplayed a little bit – it is what it is – but do I see things like that happening? Probably.’
Berman admitted that he thinks super-sizing the group could be one of the best ways of solving the troubled group’s problems.
He told Car Dealer Live: ‘The business is going to change as we come out of this. I’m not sure every store with every company will be able to survive this and there’s a high likelihood that volumes are going to be down.
‘For me, the bigger that you can be, the bigger synergies you can get. Economies of scale are bigger, healthier and better able to compete you can be.
‘To me you either need to have great representation in a small geographical area where you can really go out there and compete with the marketplace or you’ve got to be a little bit bigger.
‘Whether it is the privately held groups or some of the publics, my guess is the landscape is going to look different a year or two from what it does today.’
Berman also thinks the unique assets of the Pendragon group could be an attractive proposition for a merger with the right partner.
He added: ‘If you bought in some of our other assets with other stores and groups then I think our assets would be very complimentary.
‘When you look at PVM, Pinewood and Quickco, those are unique assets that we have that nobody else does so when you do bring things in, there are economies of scale.
‘Like Pinewood, if you bring more dealers in there’s more dealer customer base for our software company, then that company gets to grow from that as well.’
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