We Buy Any Car owner Constellation snaps up 20% stake in Lookers as dealership market continues to heat up
- Constellation has bought 78m shares from former Lookers’ director Tony Bramall
- That leaves Constellation with a 19.9% stake in London-listed Lookers
- Lookers shares were little changed today, but have risen over 30% in past week
We Buy Any Car owner Constellation Automotive has taken a near-20 per cent stake in car dealership Lookers as the sector continues to heat up amid a pandemic-fuelled boom in demand for new and used vehicles.
Having completed its acquisition of Marshall Motors in December, Constellation has now bought 78million shares from Tony Bramall, who stepped down as a non-executive director of Lookers in December 2020 after 14 years.
That leaves Constellation, which also owns BCA and Cinch, with a 19.9 per cent stake in London-listed Lookers.
Car dealerships are benefiting from a boom in demand for new and used vehicles
Lookers shares were little changed this morning, up 0.3 per cent at 88.89p, but they have risen by more than 30 per cent in the last week as rumours about the deal circulated.
The company said Constellation ‘has indicated its support for the group’s recently outlined strategy and senior leadership’.
Earlier this month, it hailed ‘record’ 2021 profits and pledged to resume paying dividends thanks to a continued boom in demand for used and new cars.
Lookers chairman Ian Bull said the firm was ‘delighted’ to welcome Constellation as a significant shareholder of the group.
‘Their investment endorses the board’s view that the group remains significantly undervalued,’ he added.
The move comes just a month after Constellation snapped up historic auto dealer Marshall Motors in a £325million deal.
Car dealers have seen business grow in the past year, with more people with savings accumulated during lockdown deciding to buy cars instead of using public transport for fear of Covid.
Meanwhile, used-car websites are benefiting from a semiconductor shortage that is continuing to limit new car production and pushing demand for second-hand vehicles soaring, with prices continuing to move upwards.
Demand has risen so much that Cazoo, another online car seller, last year was unable to refurbish used cars fast enough for sale.
Cazoo buys used cars and reconditions them using its refurbishment centres to then sell them online through its website.
The company, which counts the Daily Mail and This is Money owner DMGT among its investors, listed on the New York Stock Exchange in August last year.
Its rival Cinch was launched in October 2020 by owner Constellation and has attracted more than £1billion in private funding.
Lookers shares have risen by more than 30% in the last week amid rumours about the deal