The following stocks are the leading risers and fallers among London Main Market small-caps on Monday.
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SMALL-CAP - WINNERS
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Pendragon PLC, up 28% at 23.70 pence, 12-month range 68.19p-106.60p. The car dealership firm agrees to sell its entire UK motor business and leasing business to US dealer firm Lithia Motors Inc for a gross consideration of £250 million. Also agrees a strategic partnership with Lithia, which will include the rollout of Pendragon’s dealer management software Pinewood to Lithia’s 50 existing UK sites, as well as creating a joint venture for Pinewood’s entry into North America. This will be ‘underpinned’ by a subscription by Lithia for 279.4 million Pendragon shares for a total of £30 million. Will return around £240 million in cash dividends to shareholders. Shareholders will receive 16.5p in a cash dividend after the transaction is completed, retain around 83% of the continuing Pendragon business, and gain an indirect interest in the North American joint venture. Pendragon initially values this to be worth around 27.4p ‘with significant upside potential expected from the strategic partnership’. This is a premium to Friday’s closing price of 18.5p, it notes. The transaction will require shareholder approval. If achieved, Pendragon expects completion in the final quarter of this year.
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GCP Asset Backed Income Fund Ltd, up 5.3% at 60.85p, 12-month range 54.00p-94.40p. The fund rises as it announces combination talks with GCP Infrastructure Investments Ltd have been terminated, after a ‘significant minority’ of GCP Asset’s shareholders opposed the tie-up. Now will propose a continuation vote at its May 2024 annual general meeting. Should shareholders vote the company can continue in its present form, similar votes will be held every four years. The planned GCP Infrastructure and GCP Asset Backed Income combination was to be conducted through a contractual scheme of reconstruction, resulting in a solvent winding-up of the latter. Shares in FTSE 250-listed GCP infrastructure were down 0.3%.
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SMALL-CAP - LOSERS
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City of London Investment Group PLC, down 1.4% at 392.60p, 12-month range 322p-475p. In the year ended June 30, the investor in London-listed equities says pretax profit falls 20% year-on-year to £18.6 million from £23.2 million, as net fee income falls to £54.6 million from £58.2 million. Total dividend falls to 33p from 46.5p, as final dividend maintained at 22p, but 2022 saw a special dividend of 13.5p. Funds under management rise to $9.4 billion at the end of June from $9.2 billion at July 1, 2022.
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