7:56 am, October 8, 2023
US dealer giant AutoNation is said to be considering upping its bid for Pendragon in an effort to prise the group from the clutches of Lithia Motors.
AutoNation’s British boss, Mike Manley, is believed to be mulling over whether to increase his company’s offer for the dealer group following its recent bid, which valued Pendragon at 32p per share.
Since then, Lithia has increased its offer to 34.5p per share, with experts now saying the bid is the most likely to be accepted.
However, with Penske and Hedin withdrawing their joint deal, AutoNation is now said to be close to submitting a second attempt.
The Sunday Times reports that Manley is willing to go as high as 38p per share, which would value Pendragon at more than £500m.
The firm is believed to have the cash reserves to fund the deal with the price set to blow Lithia’s £397m offer out of the water.
Despite Pendragon’s board recommending that the Lithia bid be accepted, a £500m offer would be enough for shareholders to change course.
Meanwhile, after pulling out of the running, Hedin is now said to be willing to sell its shares, which have almost doubled in value in the past month.
According to sources close to the talks, one option could be to sell its 28 per cent stake in Pendragon to AutoNation, which could then use it as leverage for a counter-bid
The story so far:
- Lithia makes second bid for Pendragon with £280m offer
- Analysis: Why Hedin won’t be able to block Pendragon deal
- Q&A: Everything you need to know about Lithia
- Rival bid to buy Pendragon from Hedin and Sytner-owner Penske rejected
- Hedin and Penske increase their offer to buy Pendragon
- Bidding war hots up for Pendragon as THIRD suitor enters race
- Lithia increases bid for Pendragon as the bidding war for car dealer group hots up
- Hedin & Penske pull out of race to buy car dealer group Pendragon after Lithia increases offer
AutoNation is also the former employer of Pendragon CEO Bill Berman, who could in line for a near-£6m payday if the sale is completed.
Car Dealer reported last month that American executive has around 15.4m shares to cash in, meaning he would bag £5.85m from the AutoNation deal.
Berman took charge of the dealer group in February 2020, just a few weeks before the coronavirus pandemic.
Between 2020 and 2022, Berman received circa £3.57m in basic salary and bonuses. His on target earnings for 2023 are £1.5m.
This would bring his total earnings in basic pay, bonuses and share awards, assuming a deal goes through, to just under £10m since he took over as CEO.
