Inchcape mulls sale of UK car dealerships

The company confirmed that it was exploring options following reports earlier on Monday.

The UK car dealership arm might be worth hundreds of millions of pounds (Andrew Matthews/PA) (PA Archive)

Car dealership Inchcape has said that it might sell its UK retail division after reports that the business had been approaching prospective buyers.

The company said that it has had “approaches from a number of interested parties,” and is reviewing its options, one of which could be a sale.

It follows a report on Sky News that the London-listed group might be looking for a new owner for the retail division, which employs 3,700 people in the UK.

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

Inchcape statement

It runs 70 sites across the country and sells cars from brands including Toyota, Volkswagen, BMW and Audi.

“The board of Inchcape notes the recent press speculation in relation to our UK retail business,” the company told investors on Monday afternoon.

“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.”

Sky reported that the company has hired bankers from Rothschild to run the talks and that analysts thought the deal could be valued at several hundred million pounds.

After the report came out, shares in the business gained around 4.6%. However shares had been in the red earlier, so were only 0.8% up on the day.

A deal could allow Inchcape to better focus on its distribution business, which operates around the world and brings in better profit margins than the UK dealerships. Around £9 in every £10 of the company’s profits come from this arm.

A sale of the retail unit would follow other high-profile deals in the UK’s car sector. Last year Lookers was sold to a company controlled by Canada’s Alpha Auto Group in a half-billion pound deal.