Nottingham-based car retailer Pendragon has received a further unsolicited takeover proposal.
American firm AutoNation wants to acquire the entire issued and to be issued share capital of Pendragon for 32 pence per share, in cash.
It matches the recently upped offer from shareholder Hedin and PAG International.
It additionally comes after Pendragon announced that it had agreed the terms of a proposed sale of the entire issued share capital of Pendragon NewCo 2 Limited (Pendragon NewCo) which will hold, either directly or indirectly through its wholly-owned subsidiaries, the company’s entire UK motor business and leasing business, to Lithia UK Holding Limited (Lithia), a wholly-owned subsidiary of Lithia Motors, Inc. for a gross aggregate consideration of £250 million.
Lithia Motors is one of the largest automotive retailers in North America.
Pendragon and Lithia Motors, Inc. have also agreed the terms of a strategic partnership with Lithia, including the rollout of Pinewood, the company’s dealer management software (DMS) business, to Lithia’s existing 50 UK sites and the creation of a joint venture to accelerate Pinewood’s entry into the highly attractive North American DMS market.
As part of the transaction, Pendragon’s Pinewood division, which operates the company’s proprietary DMS business, would become a standalone entity, retaining Pendragon’s existing listing on the London Stock Exchange and creating a pure play Software as a Service (SaaS) business with an accelerated growth plan.
Pendragon has also revealed today (27 September) its half year results to 30 June 2023 in which profit before tax is up by 10.6% to £36.4m and revenue is up 13.2% to £2.1bn.
Bill Berman, Chief Executive Officer, said: “I’m pleased to report a strong trading performance in the first half, with revenue and profits up across all our divisions despite a challenging backdrop.
“We delivered strong volume growth for both new and used vehicles during the period, while a robust operational performance supported healthy margins in our UK Motor division.
“Pinewood continues to make very encouraging progress, with investments into product innovation and the delivery of new functionality helping to drive user growth and higher average revenue per user. I’d like to thank all our associates for their hard work delivering another strong set of results.
“Earlier this month, the Board of Pendragon formally concluded its Strategic Review of the business, which was focused on delivering full value for our shareholders.
“The Group announced a recommended transaction with Lithia Motors that would deliver the sale of our automotive retailing and leasing operations, the launch of Pinewood Technologies as a standalone, listed company and a strategic partnership with Lithia to accelerate Pinewood’s growth in North America.
“The Board has subsequently received unsolicited approaches from Hedin Mobility Group and PAG International and from AutoNation, which it is considering in consultation with shareholders. We will provide a further update at the appropriate time.”
