Proactive Investors - Inchcape PLC (LON:INCH) has announced the disposal of its UK Retail operations to Group 1 Automotive UK Limited, a wholly-owned subsidiary of Group 1 Automotive, for a cash consideration of approximately £346 million.
Larger rival AutoNation was initially tipped as a potential buyer.
Inchcape’s board said today that it has “concluded it is the right time for a new owner to take this business forward”.
Duncan Tait, group chief executive of Inchcape, said: "As we continue to deliver on our strategic ambition of becoming the leading global distribution partner to our OEM partners worldwide, this transaction represents a significant step along that journey.
“Our UK Retail business is a high-quality business, with an experienced and high-performing management team, and has been an important part of the group's growth.
“With our active international expansion into higher value distribution activities, the strategic importance of the UK retail operations has become limited.”
Inchcape shareholders are expected to net £100 million through a share buyback programme funded by the disposal, with the remaining funds earmarked for future growth initiatives.
The deal is expected to close in the fourth quarter of 2024.
Stocks to move lower
The FTSE 100 index is expected to pare back some of the 80-plus points of gains made last week.
Blue-chip stocks neared record highs on Friday, though slightly missed the mark in late trading, dipping below 8,000.
Mining and natural resources companies led the charge thanks to record gold and six-month-high oil prices.
Commodities prices will remain closely eyed in the week ahead, especially if UK inflation numbers on Wednesday deliver an upside surprise thus reinforcing gold’s inflation-hedging properties.
On the company news front, attention today turns to fund manager Ashmore Group (LON:ASHM)’s net flows.
UBS forecasts US$900 million of outflows in the quarter while consensus forecasts outflows are for US$1 billion.
There are no major macroeconomic events on the UK calendar, though the latest US retail sales print is due later in the day.