A TAKEOVER of car dealer Reg Vardy looked imminent last night as speculation mounted that the Vardy family has approved a 750p-a-share offer from larger rival Pendragon.

A national newspaper reported that Reg Vardy had agreed the terms of the bid approach from Pendragon, which values the Sunderland-based company at £420m, and that it was "practically a done deal".

An offer for Vardy, whose shares were down yesterday, is expected to be made within the next few days.

But a spokesman said that no further statement would be made.

"We made our position clear last week on the bid approach and will not be putting out any further statements just yet," he said.

Pendragon is also refusing to comment on its discussions with the Vardy board.

Once the Vardy family, which owns nearly 28 per cent of the business, has approved the approach, the board is likely to lobby major shareholders to see if they approve of the offer, before putting any bid to a shareholder vote.

One analyst said that Vardy's share price being below the offer price yesterday probably indicated that the City believed the approach had been approved.

Vardy's 98 franchises include BMW, Citroen and Fiat. It said on Wednesday that discussions with Pendragon were taking place.

Pendragon is the largest car dealer in the UK, after doubling in size following its takeover of the CD Bramall chain last year, and handles premium brands such as Jaguar, Land Rover, BMW and Mercedes through its 236 franchises.

The deal would create a chain of 334 car dealerships across the UK and would net chairman Sir Peter Vardy a windfall of £77.5m.

While Vardy is smaller than Pendragon, which is valued at £554m, it made profits of £43.8m last year, compared with £36.8m at Pendragon.

Reg Vardy's origins date back to the 1920s, when the company's founder began a haulage business at Houghton-le-Spring, Wearside.

Reg Vardy died in 1976 after more than 50 years in the business.

Published: 22/11/2005