6:41 pm, September 26, 2023
A third bidder has entered the race to acquire listed car dealer group Pendragon with American giants AutoNation submitting a bid.
Pendragon announced the bid after trading on the London Stock Exchange had closed this evening saying an ‘unsolicited proposal’ for 32p per share had been received.
The offer matches the bid submitted by Hedin and Penske on Friday after that duo’s earlier offer of 28p per share was rebuffed. However, the Hedin deal was subject to external financing and due diligence.
AutoNation’s proposal is to buy the entire company in cash and values the company at £446m.
AutoNation is listed on the New York Stock Exchange and is based in Fort Lauderdale, Florida. For its financial year ending June 30, 2023, the firm turned over $26.6bn and made EBITDA profits of $2bn.
It has 300 dealerships across the States and also owns a number of rental companies.
The move will throw the previous deal from Lithia Motors to buy only the company’s car dealerships and leasing arm for £250m into further doubt.
Pendragon said: ‘The board will consider the AutoNation proposal and will consult with its shareholders and provide an update in due course.’
As it stands the Lithia offer, which will see the company’s technology arm Pinewood hived off and take Pendragon’s palace on the stock market, will still go to shareholders for a vote on October 6.
That deal requires 51 per cent of shareholders to back it to see it go through.
The shareholders backing the Lithia deal include Schroder Investment Management Limited, Briarwood Capital Partners LP, Hosking Partners LLP, Farringdon Netherlands BV, Huntington Management LLC, and Sir Nigel Rudd.
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
The Lithia offer is worth the equivalent of 27.4p per share.
However, shareholders now have two rival bids on the table for Pendragon – both of which are straight purchases of the whole business – and both offer a better return for shareholders than Lithia’s offer.
City sources told Car Dealer that they expected a better offer to be tabled by Lithia, which currently has the backing of 26.5 per cent of shareholders.
‘They will have to come back to the table with more,’ said one insider.
David Kendrick, CEO of deal makers UHY Hacker Young, was shocked at the new bid.
He said: ‘Things are certainly heating up with the various bidders all appearing to be very keen on Pendragon. It now feels like one of them will most certainly secure the business.
‘AutoNation are one of the largest US groups so it felt like only a matter of time before they considered the UK for expansion. Exciting times that’s for sure.’
Earlier today Car Dealer reported how Pendragon is still fighting a £260m High Court case in its Pinewood division. It has moved to have the case dismissed, but the judge has yet to make a ruling.
