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MARKET REPORT: Acquisition pushes up shares in car dealer Pendragon


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Shares in Pendragon jumped after the car dealer revealed it had approved a takeover offer, but talks ended as a major shareholder declined to comment.

An undisclosed bidder’s takeover bid was 29 pence per share, representing a 35 percent premium over Thursday’s closing price.

But the offer was contingent on the backing of the company’s five largest shareholders, and only four backed the deal.

Unnamed bidder: Pendragon said the offer needed ‘commitments from all major shareholders of Pendragon’

Pendragon said the offer required “commitments from all major Pendragon shareholders.”

The latest offer for Pendragon comes five months after shareholder Anders Hedin, boss of the Swedish car retailer Hedin Group, made an offer that was rejected by Pendragon’s board.

A broker said, “I suspect Hedin has blocked this latest takeover bid for Pendragon.”

Pendragon’s other four largest shareholders are Schroders, Odey, Briarwood Chase and Hosking Partners. Together with Hedin, they have a joint interest of 64.78 percent. The news of the takeover comes two years after talks between Pendragon and Lookers stalled over a potential merger, ending a process that would have created the UK’s largest auto retail group. Shares rose 8.4 percent or 1.8 pence to 23.3 pence.

Overall, the FTSE 100 fell 0.1 percent or 8.32 points to 7439.74, while the FTSE 250 fell 0.5 percent or 104.28 points to 20,051.48.

The Footsie’s decline would have been greater without any enthusiasm for miners, especially copper miner Antofagasta, which was up 3.6 percent or 40.5p to 1170.5p, while copper price rose 2 percent.

Homebuilders were lagging behind on further signs that the housing market is cooling. As if the Bank of England’s rate hike wasn’t bad enough, the Halifax reported that the average UK house price fell 0.1 percent in July.

Taylor Wimpey, down 3.7 percent or 4.7 pence to 123.15 pence, was the heaviest blow to the big names in the industry, while Rightmove, the real estate website manager, fell 2.8 percent or 18.6 pence fell to 644.4 pence.

Tullow Oil reversed previous losses and ended up 3.4 percent, or 1.7 pence higher, at 52.1 pence, overcoming a disappointing drilling result at the BeebeiPotaro exploration, well off the coast of Guyana.

The company has now sealed and abandoned the well.

Meanwhile, Capita failed to impress investors as it continues to divest non-core assets to bolster its balance sheet.

The company, which is responsible for enforcing BBC TV licenses and providing customer support services for Scottish Power, saw profits plummet to just £100,000, from £261 million a year earlier.

It continued the sharp decline due to weaker-than-expected returns on the sale of some of its businesses. Shares tumbled 8.5 percent, or 2.48p, to 26.86p. On the brokerage front, Barclays downgraded Hikma Pharmaceuticals in the wake of the drug company’s semi-annual report on Thursday.

“With another downward revision of the numbers and without a permanent CEO, we think it will be difficult to put new money in the name,” the broker said, lowering the price target from 2250p previously to 1750p. Hikma shares are trading at 1604.5 pence, down 2.8 percent or 46p yesterday.

Citigroup reiterated its buy recommendation for Serco after the outsourcer’s results this week, but it did much good for the stock, which fell 4.6 percent or 8.4 pence to 174.8 pence. Citi estimates they are worth 255 pence and says the market has not appreciated the company’s US defense capabilities.

Among the little ones, Amur Minerals shot up 43.8 percent or 0.39 pence to 1.27 pence after it found a buyer for its Kun-Manie project in Russia’s far east. The company persuaded Bering Metals to buy the project for £29 million.

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