Nottingham-based car retail group Pendragon plc said on Monday that its talks on a potential merger with Manchester-based Lookers plc “have ceased.”

On March 10, Lookers said it postponed the announcement of its annual results because it has discovered “potentially fraudulent transactions in one of its operating divisions.”

In a stock exchange statement on Monday, Pendragon said: “The board of Pendragon plc notes recent media coverage regarding a potential merger between the company and Lookers plc.

“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. 

“Pendragon remains well-positioned having already taken significant 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.

“And, as previously announced, Pendragon continues to benefit from the support of its stakeholders during the current disruption.”