Russian tycoon shops for car dealers in UK

Russian billionaire Sergey Petrov is scouting the City for potential deals that could include an acquisition of one of Britain’s biggest car dealerships. 

The entrepreneur made his fortune building up Russia’s largest forecourt chain and selling cars from some of the world’s top manufacturers – including Mitsubishi and Hyundai – to the country’s burgeoning middle class as far back as the 1990s. Sources said the tycoon – living in Austria after clashing with the Russian state – is ‘actively looking’ at possible targets in Britain. 

The UK’s biggest car dealerships include Inchcape, by far the largest, and its smaller FTSE-listed rivals Lookers and Pendragon – both of which have been declining sharply in value despite reaping billions in sales each year. 

‘He’s looking at opportunities,’ said a City source who described Petrov as ‘a car salesman but a very sophisticated one’.’There are all sorts of possibilities being looked at but what is certain is that he believes very much in the business model of selling cars on forecourts. 

‘This is not about consolidating or reshaping the sector, but an investment in the car market and it is a good time to be a cash buyer.’ 

Petrov becomes the latest foreign mogul to size up UK investments amid mounting speculation that more could emerge in the coming weeks. 

The Mail on Sunday revealed last month that Daniel Kretinsky – who owns Sparta Prague football club – launched a raid on Royal Mail shares, emerging with a stake of about 5 per cent. Kretinsky has since increased his ownership to 8 per cent, worth about £130million. Earlier this year, Formula 1 billionaire Lawrence Stroll led a £500million rescue of Aston Martin by snapping up a 20 per cent stake and injecting new funds. 

It has since emerged that Mercedes Formula 1 boss Toto Wolff has also taken a stake. 

Petrov is regarded as a liberal entrepreneur who quickly seized on Western business practices as he forged relations with a number of the world’s biggest manufacturers. He set up his car dealership Rolf in 1991 in what was then seen as a new dawn for Russian commerce. His showrooms aspired to Western standards and soon became a trusted partner to Far East and European car makers. 

His agreements with Mitsubishi and Korea’s Hyundai were followed by deals with Jaguar Land Rover, Mercedes and Porsche. The business has since grown to £3billion sales. 

Petrov has increasingly clashed with Russian President Vladimir Putin and he opposed the country’s invasion of Crimea. He is a former senior member of the state Duma – the Russian parliament – and his net worth is estimated at close to $1billion (£810million), with much of his wealth now outside Russia. 

It emerged last year that he had appointed advisers to sell his family trust stake in Rolf amid growing tensions between himself and Putin’s government. The Russian authorities have an outstanding arrest warrant on Petrov on charges that he allegedly transferred money offshore illegally, which he vigorously denies. 

Sources said no specific British acquisition targets have been agreed, but the rapid decline in the share prices of dealerships such as Pendragon and Lookers could make them attractive. Petrov would also need the stomach for sluggish sales as the nation emerges from lockdown. 

Pendragon last month confirmed rumours it had approached Lookers over a possible merger, but the talks broke down. Pendragon has slumped to a quarter of its value over five years to £129million despite sales of £4.5billion. Lookers – which said earlier this month it may have to suspend its shares after it discovered a potential fraud – has seen an even larger slide from more than £600 million five years ago. It is now worth just £77million. Any buyer would also have to acquire the debt. 

Inchcape has fallen by about half its value during the same period to £1.9billion. 

A report last week warned that one in six jobs in the UK car industry could go in the looming recession. 

In an interview with The Mail on Sunday in May, Pendragon boss Bill Berman revealed he was considering closing some showrooms permanently. 

Major car manufacturers are also understood to have identified dealerships that will never reopen after lockdown and may be put up for sale separately. 

Petrov is thought to have been focusing on the UK but is also believed to be sizing up possible acquisitions across Europe.