Two of Scotland’s biggest motor dealers are negotiating the terms of a prospective buy-out, it has been revealed.
Arnold Clark, which operates dozens of forecourts across Scotland and the north of England, confirmed it is in talks over a possible takeover of Grangemouth-based John R Weir.
Both firms have a significant presence in Tayside and Fife, with Weir carrying several marques at its dealerships on Perth’s motor mile as well as a Mercedes showroom and commercial vehicle workshop off Dundee’s Kings Cross Road.
Arnold Clark has three sales sites and a service centre in Dundee, three forecourts in Perth, and further dealerships in Kirkcaldy and Glenrothes.
A spokeswoman for Arnold Clark confirmed talks were taking place, but refused to be drawn on details.
”We confirm that John R Weir Group are currently in discussions with Arnold Clark Automobiles about the possible acquisition of the business and, subject to the outcome of these discussions, an announcement will be made in due course,” she said.
It is understood that the deal is due to be completed by the end of the month, but the spokeswoman remained tight-lipped on questions over the timetable for and likely value of the deal.
The impact on John R Weir’s 450 staff, and its Dundee commercials workshop, also remains unclear.
Arnold Clark is yet to reveal its 2011 accounts but has continued its aggressive expansion programme in recent months, opening new dealerships in Kendal and Morecambe and acquiring Volkswagen dealerships in Glasgow and Wishaw.
But recently filed accounts from John R Weir, a family-owned firm which is still overseen by founder John Weir, showed a 41% dip in profits as margins on new and used cars continued to come under pressure.
The firm, whose list of marques includes Chrysler, Subaru and Isuzu, saw a pre-tax return of £249,000 in the year to the end of October down from £424,000 in the previous 12 months.
Sales edged up by £600,000 in the period, to £92.1m, based on a 3% increase in new car revenue and ”a good level of growth” in fleet sales.
Weir directors said gross margins were under continued pressure from the challenging trading stations, but training costs rose by 21% thanks to what the company called a commitment to staff development.
The Courier asked John R Weir to comment but the Grangemouth-based firm had not responded before publication.