Car dealership group Pendragon has confirmed that it had sought a potential merger with rival Lookers, but early talks have now ended.

In a statement, Pendragon said: “The company confirms that it held outline discussions with Lookers suggesting they might explore the potential benefits of a combination of the two businesses and how this could be attractive to both sets of shareholders.

“While Pendragon believed that such an exploration would have proved beneficial, these early discussions have now ceased.”

The company said it remains well-positioned, having taken steps to reshape the business and to cut costs “both in advance, and as a result, of the recent events which have temporarily curtailed business activity”.

Pendragon’s 2019 financial results revealed a £117.4m loss after tax, driven by significant underlying losses in the first half of the year.

Bill Berman, chief executive of Pendragon, said at the time of publication: “2019 was a year of transition for the Group that played out against challenging market conditions, however, we returned to profitable growth in the second half and this provides us with a solid platform for the coming year. At the moment, we are closely monitoring the impact of COVID-19 on the economy as the situation continues to develop.

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“We will be providing a fuller update on the Group strategy later in the year, which will continue to be based on four strategic pillars; the opportunity to create a strong, stand-alone used car brand, an improved and stable platform in the Franchised UK Motor division, delivering growth in Pinewood and further strengthening our leasing business. I am confident in the long-term prospects for Pendragon and look forward to communicating our strategy in more detail in due course.”