Fleet News

Lex retail sell-off creates franchise super-group

A 228-franchise super-group has been created following the sale of Lex Service's last 32 retail motor sites and four car repair shops to Pendragon, already the UK's largest dealership network. The deal, worth up to £95 million, marks the end of 50 years of Lex's involvement in car retailing and follows the company's acquisition of the RAC for £315 million completed in July last year.

Pendragon now dwarfs is closest rival, Lancaster, which runs 124 franchises. Pendragon's shareholders are expected to approve the sale at the end of the month and this will see Audi, Chrysler, Jaguar, Land Rover, Mercedes-Benz, Porsche, Rover, Rolls-Royce and Bentley, Volkswagen and Volvo dealerships added to a portfolio of more than 160 sites.

Chief executive Trevor Finn said the company was now well prepared for an upturn in new car sales. Last March Finn said the group was looking to raise £30 million from selling group businesses and confirmed Pendragon's future strategy of focusing on car retailing via large franchise territories. This led to speculation that its 10,647-vehicle contract hire arm, Pendragon Contracts, could be up for sale as non-core business, along with the 6,500-vehicle c.2K operation, acquired as part of the £83.7 million buyout of dealer group Evans Halshaw in 1998.

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