AI fears doom £575m takeover of FTSE software company

James Titcomb

Mon, February 16, 2026 at 8:41 PM GMT+9 2 min read

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A stock market crash triggered by fears around artificial intelligence (AI) has derailed the £575m takeover of a British company.

Shares in Pinewood AI, which is listed as Pinewood Technologies, fell by 30pc on Monday after private equity firm Apax said it no longer planned to make a bid for the software provider.

Apax said it had pulled out of talks owing to “prevailing challenging market conditions”, a reference to the widespread slump in software stocks in recent weeks.

Company valuations have fallen amid fears that the rapid advancements in AI coding tools such as Anthropic’s Claude Code and OpenAI’s Codex will shake up the software market by allowing companies to easily develop their own systems instead.

Pinewood Technologies, which specialises in software for car dealerships, said last month that it was in talks with Apax over a 500p-per-share deal that would value the company at £575m.

But Apax said on Friday evening: “In light of the prevailing challenging market conditions, Apax confirms that it does not intend to make an offer for the company.”

Pinewood’s board then said on Monday it “remains very confident in the positive long-term prospects for the group” and said it would “remain at the forefront of technology innovation”.

However, the company’s share price plunged to 307p, down 30pc on Friday’s price.

Pinewood’s software allows car dealerships to manage sales, customer relationships and accounting, and is marketed as “software as a service”, with customers paying subscriptions for the tools. The company rebranded as Pinewood AI in 2024 to focus more on artificial intelligence.

Publicly traded software businesses have endured a huge market sell-off in recent weeks. Salesforce, Snowflake and Workday have fallen between 13pc and 23pc in the last month amid fears that customers will be able to easily replicate the features of their software.

Tools such as Claude Code and Codex have surged in popularity in recent weeks, with the systems’ ability to write and test code vastly improving. The number of Claude Code users has doubled since January, according to Anthropic.

Anthropic raised $30bn (£22bn) at a $380bn valuation last week.

Birmingham-based Pinewood, a member of the FTSE 250, was created as part of a breakup of UK dealer group Pendragon. Its biggest shareholder is US car dealership group Lithia, which owns almost a third of the company.

Turbulent market conditions have hit plans for a number of planned stock market listings, including the Norwegian software group Visma, which was planning a £17bn London flotation.

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