UK dealer group Pendragon said on Monday it was no longer exploring merger talks with rival Lookers, after a media report over the weekend said that Lookers rejected its approach.
The coronavirus shutdowns have taken a toll on dealers, which were already struggling with a fall in demand and a squeeze on margins in the past year under the weight of Britain's long-drawn exit from the European Union.
Lookers, which has seen a management shakeup in the past few months, is undergoing a fraud investigation into its operating divisions after an initial probe found misstatements in its balance sheet and fraudulent expense claims.
Sky News had reported that Pendragon approached Lookers about a potential merger last month, but Lookers rejected the approach.
Pendragon declined to comment on whether it was exploring other such combinations.
Lookers is Europe's third-largest dealership group by revenue, according to Automotive News Europe's 2019 Guide to Europe's Biggest Dealers. It has 164 new-vehicle franchise points in the UK. Pendragon is No. 4 with 177 new-vehicle franchise points.