8:34 am, September 18, 2023
This morning (Sep 18), the motor trade awoke to the news that Lithua Motors has launched a second bid to take listed car dealer Pendragon into private ownership.
The US dealer group has offered an initial £280m for the firm, having previously failed with an audacious takeover bid back in the summer of 2022.
According to a bulletin to the London Stock Exchange this morning, the deal would see all of Pendragon’s car dealerships and leasing businesses fall under Lithia control.
The American outfit, which already owns Jardine Motors, would also assume all of Pendragon’s net bank debt and pension obligations.
Elsewhere, Pendragon’s dealer management software business Pinewood would be spun out into a separate business which would retain the group’s current position on the stock market, under the name Pinewood Technologies Inc.
The £280m bid, which includes £30m for shares in the spun-off Pinewood business, equates to 16.5p per share for the sale of the motors business while shareholders will retain an 83.3 per cent holding in the software business.
The development is the latest story in a long-running saga over the ownership of Pendragon, following several twists and turns last year.
In March 2022, Car Dealer reported that Pendragon had thrown out a secret £400m takeover bid by its largest shareholder, Hedin Group.
The Swedish backer made the offer via subsidiary Hedin Bil at 28p a share but Pendragon’s shareholders weren’t told about it and the board rejected the deal.
Then, a few months later in August, Hedin got its own back by blocking a new offer from a new mystery bidder, which was later revealed to be Lithia.
At that time, Lithia Motors valued Pendragon at around £460m – or 29p per share – compared to the 28p per share offered during Hedin Group’s takeover attempt.
Hedin then re-entered the fray in September, when talks got underway over a fresh takeover bid, which matched the terms of Lithia’s offer.
That second offer sparked prolonged talks and the firm was granted an extension to discuss terms in October. However, the deal eventually collapsed in December when Hedin withdrew its offer.
Since then, there has been little change to the ownership of Pendragon, with the only major development prior to today’s announcement, coming in June when troubled hedge fund Odey Asset Management was forced to offload more than five per cent of the automotive giant.
Hedin remains the largest shareholder in Pendragon and is yet to comment on the latest offer from Lithia Motors.
It is unclear whether it will once again seek to block the deal or whether it will return with an offer of its own.
However, if the last year has taught us anything, it is that this story probably has a long way to run.
Timeline of Pendragon takeover talks
- March 19, 2022: Dealership giant Pendragon throws out secret £400m takeover bid by largest shareholder Hedin Group
- August 5, 2022: Pendragon takeover bid fails after major shareholder refuses to join talks
- August 13, 2022: Mystery bidder that tried to buy Pendragon named as US dealer group Lithia Motors but deal blocked by Hedin Group
- September 26, 2022: Pendragon begins talks with Hedin Group after fresh takeover bid
- September 27, 2022: Hedin Group declares it will block any rival bid for Pendragon
- September 29, 2022: Hedin performs U-turn and now won’t block rival bids for Pendragon
- October 24, Hedin and car dealer group Pendragon granted more time to discuss takeover bid
- December 9, 2022: Hedin Group withdraws offer to buy Pendragon
- June 16, 2023: Troubled hedge fund sells majority of its shares in Pendragon
