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More Vardy shares bought.

Britian's biggest car dealer has bought another 17.8% of Reg Vardy as it prepares to take over the Sunderland chain.

Pendragon, which has around 275 dealerships, said yesterday it had paid 900p a share for its latest tranche of the Wearside company, which runs around 100 showrooms.

The Nottingham company has bought, agreed to buy or received acceptances for around 73% of Vardy and is preparing to take over full control of the management of the company within days.

But the long-running takeover battle is not over yet as sources close to the deal have said that investors who own a quarter of the company may try and hold out for an extra pounds 33m.

Hedge funds and proprietary traders are understood to be digging their heels in and holding out for pounds 10 per share for their slice of the company.

Analysts believe there is still likely to be negotiation and bartering between hedge funds and Pendragon, to allow it to grow its stake to 75% and ultimately de-list Vardy.

Although Pendragon can control Reg Vardy with a 55% stake, there are crucial parts of the merger that it cannot effect unless it owns 75% ( including consolidating the cash flow of the two companies.

Pendragon said in a statement to the City on Tuesday that it intends to re-register Reg Vardy as a private company once it increases its stake to 75%.

Manchester-based Lookers conceded defeat to bigger rival Pendragon in the pounds 506m battle earlier this month.

Pendragon indicated earlier this month that it may also be interested in bidding for Lookers as part of an attempt to create a business worth pounds 1.36bn, with turnover of around pounds 6bn a year.
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Publication:The Journal (Newcastle, England)
Date:Feb 16, 2006
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