Pendragon suitor Hedin abandons £405m takeover of car dealership

Pendragon suitor Hedin abandons £405m takeover of car dealership on ‘challenging market conditions and uncertain economic outlook’

  • Pendragon shares plummeted by nearly 30% on the announcement 
  • Hedin is a key shareholder and a vocal critic of Pendragon’s board 
  • Dealership’s board say ‘process has highlighted the value of Pendragon’  

Pendragon shares plummeted by nearly 30 per cent on Friday after a major investor walked away from a £405million takeover deal for the car dealership group.

Hedin Mobility Group, which owns 27 per cent of Pendragon, said it no longer planned to make an offer for the group, owing to ‘challenging market conditions and [an] uncertain economic outlook’.

The 29p per share in cash announced on 13 October 2022 was widely expected to be accepted by Pendragon shareholders, who have launched three revolts against bosses pay packets so far this year.

Pendragon is behind brands including Evans Halshaw and Stratstone

Pendragon shares fell 29.1 per cent to 20p by Friday afternoon, reversing gains made on the announcement of a potential deal and bringing losses to 10.8 per cent for 2022.

Hedin, whose operations are mainly in the sale and service of vehicles, wholesale of spare parts and tires for vehicles and rental car operations, has been a vocal critic of Pendragon’s board, particularly on executive pay.

Pendragon, which is behind brands including Evans Halshaw and Stratstone, suffered its third consecutive revolt over compensation for its bosses at its June AGM, with more than 65 per cent of votes cast against the pay package.

In a statement on Friday Hedin said: ‘Given the challenging market conditions and uncertain economic outlook, Hedin confirms that it does not intend to make an offer for Pendragon.’

Pendragon has itself recently altered shareholders to the challenges posed by a faltering economic outlook.

In October it warned shortages of new and used vehicles will continue into the next year as the car dealership revealed a hit to profit from rising costs.

Gross profit has remained at the ‘exceptional level’ of last year, but increases in underlying operating costs of about £7million and a rise in interest charges of about £3million have hit its bottom line.

Responding to Hedin’s announcement, the board of Pendragon said: ‘The board remains confident about the long-term prospects of Pendragon.

‘This process has highlighted the value of Pendragon and the board will continue to explore opportunities to maximise value for its shareholders.

‘There is a clear path to deliver the strategy to transform automotive retail through digital innovation and operational excellence. 

‘The economic backdrop remains challenging, however the board continues to expect to deliver group underlying profit before tax in line with expectations for the current financial year.’



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