Dealerships’ parent a potential takeover target

Weaker than expected demand comes at a time when new car supply has improved.

Could Peter Warren be a takeover target?

Moelis analysts think so, suggesting its valuable real estate portfolio could make it a lucrative opportunity.

In a research note, the analysts note its 10.7 per cent share price fall last week (shares have fallen 37 per cent this year) puts its market value at $258m.

That’s not far from the value of its $230m real estate portfolio, which includes dealership properties at Southport, Queensland and Warwick Farm in NSW.

“We see these as strategic assets that are very valuable, with the current share price implying minimal value for the dealership business,” the analysts said.

“As a result, whilst current industry headwinds are likely to persist, we see the property portfolio as providing a valuation floor.”

The cause of the share price decline was weaker than expected trade in its update for the first half of the 2025 financial year. It expects $6m to $8m profit before tax.

The result is 80 per cent below the previous corresponding period at the midpoint of guidance and below the Moelis estimates.

The fall in profit comes amid slowing demand and weaker economic conditions.

It expects poor conditions to continue.

The weaker than expected demand comes at a time when new car supply has improved, which has led to increased discounting, affecting margins.

Peter Warren listed in 2021 with a $483m market value, with shares priced at $2.90 each, as owner Quadrant Private Equity raised $260m.

The price for the float was fixed at 15 times the company’s estimated net profit for 2021.

Quadrant Private Equity sold down a 9.4 per cent shareholding and is no longer a shareholder, according to Bloomberg.

The Warren family owned 35.1 per cent.

The privately owned dealership group has been operating in Australia for more than 60 years and has 70 franchise operations, with Peter Warren, Frizelle Sunshine Automotive, Sydney North Short Automotive, Mercedes-Benz North Shore, Macarthur Automotive and Euro Collision all part of its chain.

Other shareholders included the Frizelle family, Bernard Friend, Mark Weaver and the Perks family.

One suggestion is that Quadrant may buy back the business.