Luxury car dealership HR Owen has recommended its shareholders reject a “derisory” offer to take over the business by Cardiff City owner Vincent Tan.
The company, which runs outlets in locations including London and Manchester, is continuing to fight a takeover bid by Berjaya Philippines Inc (BPI) which is owned by the Malaysian billionaire.
A spokeswoman for HR Owen said the offer of 130p a share from BPI significantly undervalues the firm which closed trading yesterday with a share price of 138p.
HR Owen’s share price rose to 144p earlier this morning.
BPI has written to HR Owen shareholders with details of its offer for the business.
It currently holds a 29.8% stake in the business and would need a 65% shareholder approval for its offer to go unconditional.
HR Owen has received letters of support from shareholders holding 31.3% of its issued share capital backing its rejection of the offer.
The current share price would indicate the market is expecting an improved offer from BPI.
HR Owen also published interim results today which revealed its pre-tax profit for the first six months of the year rose 23.2% year on year to £2.6m with revenue also rising 4.6% up to £134.3m.
A statement released by the firm this morning said the offer leaves significant uncertainty as to BPI’s plans for its employees, pensioners and manufacturers.
It also confirmed BPI’s involvement in high volume, commercial vehicles in Asia was very different from its own offering.
Jon Walden, chairman of H.R. Owen, said: “We reiterate the board’s view that the offer presented by BPI at a 7.4% premium significantly undervalues H.R. Owen and that shareholders should take no action.
“We have today announced excellent interim results, well ahead of our expectations, with profits up 23.2%.
“These results, together with last year’s strong performance, demonstrate that the management team is delivering on our strategic plan to grow our established new car sales business whilst developing new revenue streams, particularly used car sales.
“With the strong growth predictions for the luxury car market, significant number of new models planned for launch and our track record of success in delivering on our strategy, we believe there is significant growth potential in the business.”