2:41 pm, October 4, 2023
Hedin and Penske have pulled out of the three-way race to buy listed car dealer group Pendragon.
In an announcement to the London Stock Exchange this afternoon, the pair confirmed that they do not intend to make an offer for Pendragon.
Earlier this month, Hedin and Penske had teamed up to offer 32p per share for Pendragon, but subject to financing and due diligence.
The offer followed Lithia Motors’ first proposal to buy the group’s dealerships and leasing arm in a deal worth 27.4p per share.
A third American car dealer group, AutoNation, has also offered 32p per share. But both theirs, and Hedin’s offers, were subject to conditions.
On Monday, Lithia increased its proposal for Pendragon to the equivalent of 35.4p per share, boosting the price it was willing to pay for the dealer group’s assets from £250m to £397m.
That deal has the backing of the board and 28 per cent of Pendragon’s shareholders. It will go to a vote in the coming weeks where just 51 per cent are required to give it the nod.
As part of the new offer, Lithia also waived its previous conditions regarding consents from car manufacturers which could have seen them pull out if less than 70 per cent of Pendragon’s partners didn’t back the deal.
It also removed conditions regarding the CMA. Lithia’s offer will make the group the second biggest in the UK when it combines its Jardine Motors Group – bought for £300m in March – with Pendragon.
Hedin is a near 28 per cent shareholder in Pendragon and if it backed the Lithia offer it would go through. It is not known how Hedin intends to vote in the forthcoming meeting to decide the group’s fate.
Hedin said: ‘On 20 September 2023, Pendragon plc announced that it had received a possible offer from Hedin Mobility Group AB and PAG International Ltd (Penske).
‘Hedin and PAG confirm that they do not intend to make an offer for Pendragon.
‘Hedin and PAG reserve the right to make or participate in an offer for Pendragon within the next six months following the date of this announcement.’
A date for a vote on the new Lithia Motors proposal has not yet been circulated.
AutoNation could still increase its offer, but it has so far not made any comment.
