Podcast

Swansway boss Peter Smyth questions Global Auto Holdings over ‘high-risk’ Lookers takeover

  • Listen to the latest episode of the Car Dealer Podcast with Swansway boss Peter Smyth
  • Smyth gives his thoughts on the prolonged Lookers takeover that has got everybody talking
  • Chinese EV brands, the House of Lords EV review and Big Motoring World are among other topics

Time 9:43 am, August 16, 2023

Swansway boss Peter Smyth says Global Auto Holdings is taking on a ‘high-risk strategy’ with its purchase of Lookers.

Speaking on the latest episode of the Car Dealer Podcast, the UK motor trade legend questioned how the Canadian outfit will be able to keep Lookers profitable.

The firm, which has a similar turnover to Swansway Group, is said to be borrowing more than £500m to fund the deal to take over Lookers, and Smyth says the deal is likely to eat into the firm’s impressive profit margin.


Chatting about the deal with hosts James Baggott and Jon Reay, he said: ‘I am a little bit bemused by it because the company that are buying Lookers have a turnover of around $1bn and Swansway as a business has a turnover of £880m, or thereabouts, so in turnover terms and sheer number of site terms, they’re a similar size to us.

‘They are very much more profitable than us – or certainly they have been during the Covid period where we’ve all enjoyed exceptional profits – but to me it just seems a massive undertaking for a company of that size to take on something the size of Lookers.

‘They have obviously borrowed the £500m and all that they can do really is leverage that borrowing against the properties held in the balance sheet of Lookers.


‘Lookers probably have been sat on properties for years and years and years. Probably some of them will be written down. Property prices will have gone up, so I’d guess there will be a revaluation of the properties and that’s what they’ll be borrowing against.

‘I just think that for them it seems like a high-risk strategy, especially at the moment when if you want to borrow money on term debt you are paying  approaching eight per cent and it will be probably no different in the States.

‘All that debt they’re going to put on to Lookers balance sheets, it will undoubtedly affect the profitability in the same way that when TDR bought Asda it’s now put Asda into a loss situation, and as an OEM I think they could be a little concerned about that.’

The Lookers deal was one of several topics up for debate on this week’s episode of the podcast with Reay, Baggott and Smyth discussing the biggest industry headlines.

It came after the deal edged closer earlier this month when Cinch agreed to accept Global Auto Holdings’ revised offer of 130p per share.

The trio also chatted about the issues facing the new wave of Chinese EV brands, a House of Lords inquiry into electric cars and record sales from Big Motoring World.

A full list of the stories discussed can be found here:

You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.

Smyth also recently appeared on the first edition of our new Inspiring Leaders Podcast. Catch the full episode here.


Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.



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