4:50 pm, September 20, 2023
Pendragon has rejected an unsolicited bid to buy the business by former suitors Hedin and the American owners of Sytner, Penske.
In an announcement issued this afternoon, Pendragon said the offer to acquire the whole company for 28 pence per share had been knocked back.
The Lithia deal which is currently on the table is worth the equivalent of 27.4p per share, according to analysts.
The firm said the board considered the new proposal and took advice from its advisors but said it ‘undervalued’ the company.
Pendragon said it remains committed to the offer made by Lithia on Monday to buy its dealerships and leasing business for £250m.
As part of that deal, Lithia will invest £30m in the DMS business Pinewood which will take Pendragon’s place on the London Stock Exchange.
Pendragon said the new bid was ‘unsolicited and preliminary’ and subject to a number of conditions ‘including the completion of due diligence and external financing’.
- Get-out clause for Lithia if 30 per cent of car makers don’t back deal
- Neil Williamson to get top job leading Lithia’s UK group
- Q&A: Everything you need to know about Lithia
- Lithia makes second bid for Pendragon with £280m offer
- Analysis: Why Hedin won’t be able to block Pendragon deal
- Timeline of events: How the Pendragon deal unfolded
Pendragon’s statement said: ‘The board carefully considered the proposal, including taking advice from its advisers, and concluded that it fundamentally undervalues the company and is therefore not in the best interests of shareholders or other stakeholders.
‘The board is excited about the future prospects for Pendragon as a result of the transaction announced with Lithia Motors, on 18 September 2023, which, if completed, will deliver a substantial cash dividend and create a pure play Software as a Service business with an accelerated growth plan and a strategic partnership to enter North America.’
Hedin is a 26 per cent shareholder in Pendragon and launched an aborted bid to buy the company at the end of last year after previously blocking Lithia’s bid to buy the firm in the summer of 2022.
The arrival of Penske – the owner of the second most profitable car dealer group in the UK, Sytner – is a shock. It is not clear how the deal would have been structured and how Hedin and Penske planned to work together.
Pendragon advised shareholders to take ‘no action at this time’ and said its announcement ‘has been made without the consent of Hedin and Penske’.
