7:17 am, November 21, 2022
Hedin Group has been granted another extension to its ‘put-up or shut-up’ deal deadline to buy car dealer group Pendragon.
In an announcement to the Stock Market this morning (November 21), Pendragon said the deadline which was due to expire at 5pm today has been extended to 5pm on December 9.
The dealer group said this was ‘in order to finalise the necessary transaction documentation’ but added that there could be ‘no certainty’ a firm offer will be made.
Yesterday, rumours circulated that Constellation Automotive Group could also be about to enter the race to try and buy Pendragon.
A report in the Sunday Telegraph suggested that the We Buy Any Car and Cinch owner is weighing up a rival bid to that already tabled by Hedin Group.
Constellation snatched previously-listed car dealer Marshall Motor Group off the Stock Market earlier this year and already owns a 20 per cent stake in Lookers.
However, the paper suggested the £400m deal with Hedin was as good as done and that the Pendragon board spent the weekend putting the finishing touches to it.
The publication cited ‘city sources’ who said the board has indicated to Anders Hedin, the boss of the suitors, that they are minded to recommend the 29p per share offer to shareholders.
Any deal would have to be backed by investors.
That plan could be scuppered if separate city sources for the paper are to be believed, by BCA owner Constellation.
A rival bid would have to be in the region of 35p per share and would likely attract the attention of the Competition and Markets Authority as Constellation would then have around 20 per cent of the UK car dealership market, claims the newspaper.
The highly acquisitive automotive group now has more time to consider its bid but would need to show its hand soon.
Hedin has said it would only consider bids in this region for its 27.5 per cent stake.
The Swedish firm previously blocked a bid from US car dealer group Lithia Motors which tried to buy Pendragon in August with a 29p per share offer.
- What is Constellation Automotive Group?
- Marshall Motor Group sold for bargain price to Constellation
Pendragon’s announcement this morning said: ‘On 26 September, Pendragon confirmed that it had received an unsolicited, preliminary and conditional proposal from Hedin regarding a possible cash offer for the entire issued and to be issued share capital of Pendragon at 29 pence per share.
‘On 24 October, Pendragon confirmed that the put-up or shut-up deadline had been extended to 21 November to allow Hedin Group to finalise its necessary due diligence, which is now substantially complete.
‘In order to finalise the necessary transaction documentation and in accordance with Rule 2.6(c) of the Code, the company has requested, and the Takeover Panel has consented to, an extension to the date by which Hedin Group is required either to announce a firm intention to make an offer for Pendragon… or to announce that it does not intend to make an offer.’
The Telegraph predicted Pendragon may ask for more time to finalise a deal with Hedin before it is put to shareholders for approval.
None of the parties commented when the paper approached them.
Pendragon – which operates the Stratstone, Evans Halshaw and Car Store brands and owns the software firm Pinewood – was the third most profitable car dealer in the Car Dealer Top 100.
Pendragon recently revealed a pre-tax profit of £14.7m in the third quarter and said it was on course to meet full-year expectations.
