The prospect of further consolidation set the car dealership sector on fire yesterday.

News that CD Bramall, Britain's third biggest motor dealer, had received a formal takeover approach saw Reg Vardy marked 23.75p higher at 517p, Pendragon rise 14p to 210p, Lookers advance 7p to 281.5p and European Motor Holdings climb 9.5p to 183p.

Dealers reckon Inchcape might be interested in buying Bramall, though analysts reckon a deal with a financial buyer, such as Royal Bank of Scotland, which bought Dixon Motors a couple of years ago, is more likely.

Whoever the bidder any deal will need the blessing of chairman Tony Bramall, who moved the firm from textiles to motors. He owns 33% of the company.

Bramall shares closed 73p higher at 556.5p.