AUS
NZ
UK
CA
USA
IND
.jpg)
Summary
- Vertu Motors, the fifth-largest automotive retailer in the UK, witnessed shareholders revolt against CEO remuneration resolution.
- Cambria Automobiles has urged its shareholders to accept the takeover offer from Cambria Bidco Ltd.
The automobile sector suffered severely due to the pandemic as the people were bound to remain at home, and no physical shop was open. However, with the successful vaccination drive and government effort, things are turning back to normal, and it is also evident with the surge in car sales numbers. British new car registration in May stood at 156,737, according to the Society of Motor Manufacturers and Traders (SMMT). Car sales saw a jump of over 3,000% in sales after many car dealerships reopened for the public. As automobile dealerships reopen across England, people can test drive and choose car models, which will certainly help in the full recovery of the automobile sector soon.
Here we are going to discuss two stocks from the automobile retailing segment who were in the news recently.
Vertu Motors Plc (LON:VTU):
Vertu Motors Plc is the fifth-largest automotive retailer in the UK with a network of 149 sales outlet, out of which 145 are franchised sales outlets, and four are non-franchised, spread across 115 locations. The company focuses on acquisition strategy to drive efficiency and productivity through its dealership network.
The company in its recently concluded AGM, faced backlash from shareholders over the bonus payments to its CEO Robert Forrester, who is likely to receive a bonus receive £200,000 in bonus payments. The company has decided to pay one-off bonuses to its executives, which will be paid fifty per cent in cash and fifty per cent in shares with the shares required to be held for three years from the date of issue.
When the Remuneration report was put for a vote, it received a negative reaction from the shareholder, with as many as 32.37% voting against the resolution. Many shareholders didn’t support the resolution to a pay six-figure sum to the executives by the company, which was severely impacted by pandemic restriction and claimed millions of pounds in COVID-19 support from the UK government.
Vertu Motors Plc, since lockdown, has laid off 345 staff and claimed £8.7 million in business rate relief and £ 17.7 million in Government's Job Retention Grant.
The shares of Vertu motors plc were down by 3.12% at GBX 46.60 on 24 June at 09:55 PM GMT+1. It had a market-cap of £177 million.
Cambria Automobiles Plc (LON:CAMB)
Cambria Automobile is a retailer of new and used cars, motorbikes as well as commercial vehicles in the UK. The company provides a one-stop solution for all customer needs including, vehicle financing, insurance, vehicle maintenance during ownership. The company operates through 45 franchises.
Cambria Automobile has received a takeover offer from Cambria Bidco Ltd. The Cambria Bidco, owned and controlled by Mark Lavery, CEO of Cambria Automobiles, made an 80 pence per share cash offer that valued the company at £80 million and represented a premium of 21.2% to the closing price of 66p per shares on 19 March 2021, the last business day ahead of the offer period commencement.
The shareholders will receive 80p in cash for each share held by them. The independent committee has recommended shareholders vote in favour of the takeover offer. The resolution needs to pass with at least 75% shareholders’ approval.
Cambria shares were trading at GBX 77.00 on 24 June at 13:23 PM GMT+1 with a market cap of £77 million.
