Pendragon PLC (LON:PDG) has confirmed it approached rival car dealer Looker PLC (LON:LOOK) about a merger but had its proposal rejected.
In a statement responding to press speculation, Pendragon said it held outline discussions as it believed a merger would have been beneficial to both sets of shareholders.
Talks have now ended, it added, with Pendragon saying it remains well-positioned despite the impact of the coronavirus lockdown after reshaping its business and reducing costs in advance.
Reports at the weekend suggested that Lookers’ board felt it already had enough to do coping with the impact of coronavirus and an investigation by the Financial Conduct Authority.
In March, Lookers said it was delaying the publication of its full-year results owing to a fraud investigation. This has identified certain misrepresented debtor balances and fraudulent expenses claims.
Pendragon made a hostile bid for Lookers in 2006 worth £260mln but now both companies combined are worth a little over £200mln.
Lookers has150 UK sites and a combination with Pendragon would have created a business with gross sales of more than £10bn.