UPDATE 2-Reg Vardy gets two new bid approaches, shares rise


(Recasts, adds analyst comments, updates shares)

By David Cullen

LONDON, Nov 29 (Reuters) - Reg Vardy Plc , Britain's second-largest motor retailer, said on Tuesday that two new bidders have emerged following a 750-pence-a-share bid received this month from the UK's biggest car seller, Pendragon .

Vardy, whose franchises include BMW, Citroen and Fiat, said last week it was in talks with Pendragon over an unsolicited 420 million pound ($724 million) offer after a bid made on Nov. 16.

"Reg Vardy can now confirm it has received two further approaches from potentially interested parties," Vardy said in a statement. "These approaches are above the 750p level currently under discussion with Pendragon."

UBS analyst Peter Whiting said in a note: "We expect this to support calls from Vardy holders for a higher price".

However, some analysts said they found it difficult to pin down who the new bidders might be.

Some said British car dealer Inchcape was unlikely to buy a competitor in one swoop given the way it has steadily grown its UK business over many years.

They also said Inchcape's business was more international in nature, which might also rule it out as an interested party.

UK-listed motor retailer European Motor Holdings Plc might also consider a bid, but with a market capitalization of around 153 million pounds may be too small to carry it through, analysts said.

Inchcape refused to comment, while senior officials at European Motor Holdings were unavailable.

Shares in Reg Vardy were up 5.3 percent at 773-1/2p by 1203 GMT, valuing the business at around 435 million pounds.

Pendragon stock was nearly 3.6 percent lower at 48p, giving it a value of around 630 million pounds.

A successful deal for Reg Vardy would make it Pendragon's second in as many years and comes at a time when sales of new cars are declining in a gloomy retail environment.

Pendragon snapped up CD Bramall in 2003, nearly doubling the size of its business and strengthening its position with premium brands such as Jaguar, Land Rover, BMW and Mercedes. (Additional reporting by Pete Harrison)



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