Constellation Automotive owner TDR Capital acquires stake in Vertu Motors

Constellation Automotive owner TDR Capital has extended its presence in the car retail sector with the purchase of a 3.1% stake in Vertu Motors.

The move by the private equity house behind BCA, cinch, Marshall Motor Group and WeBuyAnyCar operator Constellation – worth around £6.8 million – was confirmed in documents published via the London Stock Exchange this morning (February 8).

Although the minority stake gives TDR and Constellation little influence on the direction of AM100 PLC Vertu, many will see it as a strategic play.

TDR acquired a near 20% stake in Lookers last January is a move that some suggested could have been an effort to ensure another investor did not take that business private at a later date.

Constellation took the Marshall Motor Group private after having its near £400m offer for the former PLC confirmed in May last year.

Last month Cambria Automotive chief executive Mark Lavery, who re-privatised his business in 2021, told AM he thought it was possible that the automotive retail PLC model will be consigned to history by 2025.

“By 2025 I don’t think we will see any because, put simply, the investment opportunity that’s there isn’t seen by the investment community,” Lavery said.

“Look at the value attributed to businesses like Vertu and Lookers. It is in no way reflective of their scale or of the two absolutely cracking years that the sector has just had.

“Maybe agency model retail has spooked investors.”

Lavery was speaking to AM just days after Lithia Motors revealed that it viewed Jardine Motors as “a platform for future growth in the UK” after it emerged the US-based car retailer was in advanced talks to acquire the AM100 group.

But the offer, believed to be in the region of £300m, was said by many to underline the undervalued nature of the UK’s publicly-listed car retail groups.

Commenting on the benefits of privatisation, Lavery told AM: “When we publish our results in May people will see that we’ve had a good year and it was pointless being a listed business anymore.

“With all due respect to our former shareholders, I spent far too long listening to people tell me what to do and how to do it. Now it’s time to get on with business.”