8:44 am, August 5, 2022
A bid to buy dealership chain Pendragon has fallen through after a major shareholder refused to take part in discussions.
An announcement issued by Pendragon this morning (Aug 5) via the London Stock Exchange said a large international corporate had presented a non-binding board-approved cash offer of 29p a share for all its share capital plus any to be issued.
However, the deal – said to be worth some £403m – depended on all of Pendragon’s major shareholders giving an irrevocable commitment to the unnamed bidder.
Industry analysts have speculated that it may well have been largest shareholder Hedin Group that effectively blocked it:
Sweden’s Hedin Group has been a long-time critic of how Pendragon is managed and earlier this year had a secretive £400m takeover bid of its own rejected.
Together, Hedin Group and owner Anders Hedin already own 53 per cent of Pendragon.
In the statement, Pendragon – whose brands include Evans Halshaw and Stratstone – said the offer had been presented after a period of due diligence.
Its board decided the proposal was worth discussing with its five largest shareholders.
Four of them gave strong support for it and were willing to give their irrevocable commitment.
However, Pendragon said it wasn’t able to engage with one of the shareholders, so because of the uncertainty the bidder had withdrawn its non-binding offer and both sides ended discussions.
Car Dealer has contacted Hedin Group for a confirmation or denial that it had effectively ended things.
Pendragon said today it ‘continues to believe strongly that its market-leading proposition positions the company to capitalise on the growth opportunities and navigate near term market headwinds’.
Last month, it said it expected its first-half pre-tax profit to be down by more than £2m on last year.
It forecast a group underlying profit before tax of circa £33m, versus £35.1m for the same period last year.
In today’s statement, Pendragon said: ‘The company continues to expect to deliver group underlying profit before tax in line with board expectations.
‘The board has full confidence in the company’s strategy and in management to continue to deliver significant value for all stakeholders.’
