Pendragon bidding war prospect pushes shares higher

20 September 2023

A second offer in three days for Pendragon has sent shares in the business up more than 12% and raised the prospect of a bidding war for the dealer group. The new offer of 28 pence a share for the whole of Pendragon comes from Swedish firm Hedin Mobility Group and US group Penske and follows a bid two days ago by Lithia which aims to buy the retail and fleet operations and leave the Pinewood software business as a PLC.

However, the new offer has been “unanimously rejected” by the Pendragon board.

In a stock market statement Pendragon said: “The proposal is subject to a number of conditions, including the completion of due diligence and external debt financing.

“The board carefully considered the proposal, including taking advice from its advisers, and concluded that it fundamentally undervalues the company and is therefore not in the best interests of shareholders or other stakeholders.

“The board is excited about the future prospects for Pendragon as a result of the transaction announced with Lithia Motors, Inc on 18 September 2023, which, if completed, will deliver a substantial cash dividend and create a pure play software as a service business with an accelerated growth plan and a strategic partnership to enter North America.

“There can be no certainty that any firm offer will be made. Shareholders are advised to take no action at this time.”

Auto Retail Agenda understands the Lithia purchase took Hedin, Pendragon’s largest shareholder and previous bidder for Pendragon, by surprise. Evans Halshaw

Hedin first made a 28p a share offer for Pendragon in early 2022 and then increased this to 29p a share later in the year, valuing Pendragon at £411 million. At the same time, Hedin blocked a 29p a share offer from Lithia.

Shares have risen more than 12% today, 20 September, and 42% in the past week.

Pendragon shareholders are set to vote on the Lithia deal on 6 October. The offer requires a 51% majority to be approved.

Pendragon is also set to reveal its first-half results next week.

Tags: Hedin Mobility, Lithia, Pendragon, Penske, Pinewood, Pinewood Technologies, SaaS, Sytner

Why Subscribe?

As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:

Get informed and boost your business potential
More than 1,200 fellow executives have joined us since launch
Independent, carefully crafted, unique content relevant to you and your business
Develop a greater awareness of market trends and opportunities
Access to a wide range of materials whenever, wherever and however you want it
Significant discounts on ARN events, reports and other publications

Subscribe now

Latest ARN Blog Post

Testimonials

I’ve found today really exciting. I’ve attended a number of conferences this year and I’ve been surprised by how well attended this was by some of the great players in the industry and by the quality of the speakers. I’d say it was definitely the best event I’ve attended this year.

Chris Penny, Brand Director, Auto Trader UK

I found it very insightful. I’ve taken copious notes and there are lots of things we can take away and do.

Tracy Perryman, Managing Director, Denbury Diesels

I’ve been an Auto Retail Network subscriber since it was first launched. I find Auto Retail Bulletin particularly useful since it gives real, in-depth analysis into the issues facing this industry.

Ken Savage, commercial director, Perrys Group

This is the 3rd time Ive attended the event & I thought today’s was the best one yet, the content was superb. It really gave us an insight into how weve got to take our business forward.

Ian Godbold, Marketing Director, Cambria Automobiles

I use Auto Retail Bulletin to keep fully up to speed with what is going on. The analysis is first class and I read it from cover to cover. It really helps my understanding of our industry and is not to be missed.

Robert Forrester, CEO Vertu PLC