A TAKEOVER race for car dealer Reg Vardy was sparked yesterday as the Sunderland company revealed it was in talks with two more potential buyers.

Shares in the dealer hit another all-time high yesterday after the company made the announcement.

Both mystery parties have made approaches valuing the company at more than the £422m previously proposed by rival dealership Pendragon, Vardy said.

Yesterday, shares in Reg Vardy closed at an all-time high of 786p as investors welcomed the prospect of a possible bidding war and looked to a price higher than the 750p-a-share proposed by Pendragon two weeks ago.

Shares in Nottinghamshire-based Pendragon, which has 236 franchises in the UK, slumped yesterday as the firm faced having to raise its bid to clinch a deal.

The identities of the two new parties have not been revealed.

In yesterday's statement, Vardy said: "The board can now confirm it has received two further unsolicited approaches from potentially interested parties.

"These approaches are above the 750p level currently under discussion with Pendragon plc.

"The board intends to continue discussions with all these parties with a view to obtaining the best outcome for the company.

"There can be no certainty that any offers will be forthcoming."

Reg Vardy, which made profits of £43.9m during the year to April 30, has almost 100 dealerships.

It told investors earlier this month that sales of both new and used cars had been strong since the beginning of May.

Pendragon snapped up CD Bramall dealerships in 2003 for £230m and its portfolio includes specialist and luxury franchises such as BMW, Ferrari and Land Rover.

In a statement, Reg Vardy said it would continue discussions with Pendragon and the two other bidders.

The company dates back to the 1920s when its founder - Reg Vardy - began a haulage business in Houghton-le-Spring, near Durham.

In 1946, it began to sell cars and four years later was appointed as a retail dealer with the Ford Motor Company at Stoneygate, Houghton-le-Spring.

Mr Vardy died in 1976, having maintained road haulage and car retailing businesses for more than 50 years. His son, Sir Peter Vardy, is now chief executive.

The Northern Echo reported after the initial approach from Pendragon that Sir Peter was rumoured to be in support of a potential takeover.