Auto Retail Agenda: 20 November 2023
19 November 2023
- HALFORDS TARGET OF £1.4bn MERGER
- ARNOLD CLARK LAUNCHES REWARDS INITIATIVE
- KAHN ‘MISLED PUBLIC’ OVER LONDON ULEZ
- ATG AUTO TRADER TOOLS GO LIVE
- HYUNDAI AMAZON ‘NOT AN EXISTENTIAL THREAT TO RETAILERS’
- EMIL FREY PARTNERS WITH TVS
- STOCKWATCH
- COMING UP: Autumn Statement
- BORROWING COSTS FALL RAISES RECESSION FEARS
- FCA PLANS ‘ASTONISHING’ DATA GRAB
Halfords target of £1.4bn merger
Halfords is the target of a £1.4bn merger approach by van rental firm Redde Northgate. Discussions took place over the past few months and a nil-premium merger was initially proposed, but abandoned due to disagreements over price. It is now understood Redde Northgate, who’s non-executive chairman is Avril Palmer-Baunack, could mount a fresh bid if the valuation gap between the two businesses closes.
Palmer-Bauback is also the executive chairman of Constellation Automotive Group which owns Marshall Motors, BCA, Cinch and We Buy Any Car.
“Both share prices weren’t doing fantastically well at the time so there is nothing live at the moment,” said a source close to the negotiations. “However, it could come back.”
Redde Northgate has a market cap of £843m. Halfords, whose annual turnover last year was £1.6bn, has a valuation of £512m.
At current values, a nil-premium merger would value the combined company at £1.4bn.
Halfords is also amongst the bidders for Wiggle, the online bicycle chain which fell into administration last month.
Both Redde Northgate and Halfords declined to comment to The Telegraph on the reports.
Arnold Clark launches Rewards initiative
Arnold Clark has launched a new rewards programme for customers. The retailer has teamed up with Mando Connect to introduce Arnold Clark Rewards, which gives members a range of benefits including vouchers and giveaways.
The loyalty programme works through the Arnold Clark app.
Kahn ‘misled public’ over London ULEZ
The ASA is set to criticise TfL for “misleading” claims about the expansion of the London ULEZ zone. A draft report has been leaked after being sent to interested parties. The Mayor of London’s transport authority spent £9m on marketing ahead of the ULEZ expansion; the ASA is expected to criticise claims about the ULEZ zone reducing poisonous NOx particles.
TfL is “strongly challenging” the draft recommendations.
ATG Auto Trader tools go live
Automotive Transformation Group (ATG) has gone live with the integration of Auto Trader’s API suite, Auto Trader Connect, into its NetDirector SalesMaster ecosystem. ATG says retailers will now benefit from real-time data connectivity to boost efficiencies, margins and customer satisfaction.
WORLD NEWS
Hyundai Amazon ‘not an existential threat to retailers’
Hyundai’s new US partnership with Amazon appears to be an enhanced lead generation tool that will be additive to a retailer’s offerings, said Bank of America analyst John Murphy. His team does not see the partnership as an existential threat to retailers.
Because current US franchise laws require retailers to be the intermediary, the partnership could actually augment the business of well-run retailers who are now able to use Amazon’s technology. It could also drive consolidation amongst retailers, boosting the shares of publically-traded retailers.
BofA duly reiterated buy ratings on AutoNation, Group 1, Lithia and Penske.
Emil Frey partners with TVS
Indian motorcycle brand TVS has signed an import and distribution agreement with Emil Frey, Europe’s largest retailer group. The deal with the retailer marks a significant global expansion for TVS. Emil Frey director Lorenz Frey-Hilti said he was proud TVS was to use the retailer’s expertise and distribution network “to bring their great products to consumers”.
STOCKWATCH
Closing prices on 17 November 2023 and weekly change
Auto Trader Group 706.8p (+24.8p / +3.5%)
Caffyns 550.0p (n/c)
Halfords 234.0p (+12.0p / +5.2%)
Inchcape 666.5p (+15.5p / +2.3%)
Motorpoint 79.0p (+2.0p / +2.5%)
Pendragon 31.85p (-0.3p / -0.9%)
Vertu 85.4p (+2.1p / +2.4%)
COMING UP
Tuesday, public sector net borrowing
Wednesday, Autumn Statement
Wednesday, Halfords interims
Friday, GFK consumer confidence
MONEY MATTERS
Borrowing costs fall raises recession fears
Government borrowing costs have fallen to their lowest level in six months, raising concerns the economy may enter recession in early 2024. Money markets are betting a sharp drop in retail sales, which contracted 0.3% in October, will force the Bank of England to bring forward interest rate cuts.
Equity markets are also forecasting that interest rates have peaked. The FTSE 100 was up 2% last week.
FCA plans ‘astonishing’ data grab
The Financial Conduct Authority is consulting on plans to require up to 40,000 consumer credit companies to hand over customer data including date of birth, postcode, income, expenditure and the size of their loans. The industry warns it will place a huge burden on small and mid-size companies, and also questions how the regulator will safeguard the information.
If enacted, businesses will have 12 months to comply with the changes.
Tags:
Amazon, Arnold Clark, ATG, Auto Trader, Autumn statement, Emil Frey, FCA, Halfords., Hyundai, Mando Connect, Redde Northgate, Sadiq Khan, TVS, ULEZ 
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