Fleet News

Northgate shares soar on news of £800m bid

EXECUTIVES at Northgate, the UK’s largest daily rental group, were this week locked in talks with financier Guy Hands after receiving a bid approach estimated at £800 million.

The company stressed that no offer had been made as Fleet News went to press but an insider confirmed that Hands, the man behind private equity firm Terra Firma, had made an approach.

It was speculated in the Mail on Sunday at the weekend that if an offer for Northgate was made and accepted then Hands could also make an offer for bus and train operator Arriva’s vehicle leasing business.

Hands was expected to make a cash bid of about £12.50 a share, or £800 million. In a statement, Northgate confirmed an approach had been made but stressed that no offer may be forthcoming.

It said: ‘The company announces that it has received an approach. There can be no certainty that any offer will be forthcoming. A further announcement will be made in due course, if appropriate.’

Northgate was this year named as the UK’s biggest daily rental company in the Fleet News Daily Rental Guide and operates 52,000 vehicles – 46,000 vans and 6,000 cars. Last year, the company completed the purchase of Spanish rental company Furgonetas de Alquiler SA (FUALSA), which had a fleet of 14,000 vehicles.

This year, it continued its expansion in Spain, acquiring van rental company Record Rent in a deal worth e140 million (£94 million).

The company it bought operated throughout Spain in the medium to long-term commercial rental market, with 16 depots and a fleet of more than 18,000 vehicles.

It had more than 2,300 corporate clients and Northgate bosses said they intend to retain the existing management and operate the Record Rent brand separately from its existing Spanish brand, Fualsa.

In July this year, Northgate announced a yearly pre-tax profits increase to £55.6 million. The increase from £44.9 million last year represents a 23.8% rise for the year to April 30. Turnover was up 28.9% to £458.3 million from £355.6 million.

It operates from 88 locations in the UK and also supplies a host of fleet-specific services, including vehicle monitoring.

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