US car giant tables improved £397m offer for Pendragon’s UK motor and leasing business
American car dealership Lithia has improved its offer to buy Pendragon’s UK motor and leasing business in a three-way bidding war.
Last month, the Nottingham-based car retailer agreed a deal worth around £280million, or 27.4p per share, to sell its UK dealership operation to Lithia.
However, last week AutoNation put in a takeover proposal worth around £447million or 32p a share in cash to buy the whole company.
Hedin, which already owns a 28 per cent stake in Pendragon, then launched a joint bid with Penske, which owns Britain’s bigger motor dealer, Sytner.
Pendragon rejected an initial 28p per share approach from the pair but then received a further proposed bid worth 32p per share and said it would consider the sweetened offer.
Offer: Last month, Pendragon agreed a deal worth around £280m, or 27.4p per share, to sell its UK dealership operation to Lithia
Lithia has now sweetened its approach for the UK operation to 35.4p, in a move worth £397million.
The deal would also see Pendragon roll out its dealer management software arm, called Pinewood, to Lithia’s UK sites and to enter the North American market.
The firm would remain listed on the London Stock Exchange and change its name to Pinewood Technologies.
Attempts by AutoNation and Hedin for a full takeover have been hampered by a need for 75 per cent approval from shareholders.
However, the Lithia deal only needs majority approval in order to progress. Lithia boss Bryan DeBoer said they had ‘great growth opportunities for the Pendragon employees’.