Motors.co.uk said to be circling Cazoo Group

10th May 2024 12:40

(Sharecast News) - Privately owned used-car platform Motors.co.uk is reportedly circling Cazoo Group, which is on the brink of administration.

According to Sky News, Motors.co.uk is a leading contender to buy Cazoo's marketplace operation, which would include its brand and intellectual property assets.

The process to auction the used car platform's constituent parts comes after it spent tens of millions of pounds on sponsorship deals in football, snooker and darts in a rapid attempt to gain market share.

Earlier this week, Cazoo filed a notice of intention to appoint Teneo as administrator, just three years after it floated in New York with a valuation of $8bn. The filing was intended to provide protection from creditors while Teneo finalises asset sales.

Since an announcement last month about a restructuring of the group, advisers have offloaded a string of assets and unwound Cazoo's previous operating model to transform it into a marketplace.

Among those have been the disposal of Cazoo's vehicle fleet, which sources said had been achieved at higher-than-anticipated values, reflecting a current shortage of used cars in the market.

Sky said Teneo is also said to have struck a deal with Constellation Automotive, the owner of Cazoo's rival, Cinch, involving a handful of sites and dozens of jobs.

It was understood that several parties have expressed an interest in Cazoo's wholesale operation and other vehicle collection sites.

One industry source told Sky the pivot to a platform model had seen its inventory rise to more than 15,000 cars, with Cazoo now the online vehicle marketplace where consumers can buy and sell cars under a single brand.

An insider told Sky the formal triggering of insolvency proceedings was likely to attract wider attention in Cazoo's assets, including its brand.

It was unclear on Friday how much Motors.co.uk or other suitors for the marketplace were likely to bid for it.

A spokesperson for Cazoo told Sky: "Our new marketplace model, where consumers can both buy and sell cars, is revenue generating and performing ahead of expectations with interest from almost 100 car dealers including many household names wishing to trade on the Cazoo platform.

"Cazoo has successfully restructured and significantly reduced the cash burn of the group, resulting in a cash position in excess of £95m at 30th April 2024 compared to £113m at 31st December 2023, and the platform now has approximately 17,000 cars which is more than double the volume we previously supported and demonstrates the scalability of our technology and the strength of the team.

"We are making efforts to secure the next phase of our business and are grateful to our employees for their hard work and commitment."

Motors.co.uk did not respond to enquiries from Sky, while a spokesperson for Cazoo declined to comment on talks about asset sales.