Car dealer Pendragon gears up for £400m bid from top investor – MKFM 106.3FM

Pendragon, the London-listed car dealership behind brands including Evans Halshaw and Stratstone, has received a new £400m takeover bid from its largest shareholder.

Sky News has learned that the Hedin Group, which owns around 26% of Pendragon, has submitted an offer of 29p a share for the company.

The procedure is to be confirmed on Monday morning in a stock exchange announcement.

Hedin – led by founder Anders Hedin – operates more than 200 car showrooms in Belgium, Norway, Sweden and Switzerland through its subsidiary Hedin Bil.

It has been a vocal critic of Pendragon’s board of directors in recent years, particularly over executive pay.

Mr Hedin made an earlier offer at 28p a share earlier this year which was rejected by the board of the target company.

But his latest proposal is expected to see Pendragon begin talks with Hedin Group, according to an analyst.

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At 29 pence, the new offer has the same value as a separate offer submitted over the summer by Lithia Motors, a US auto dealership giant with a market value of over $7 billion.

In a statement confirming that approach in August, Pendragon said Lithia’s offer “deserved the engagement with its top five shareholders and [it had] received strong support for the proposal from four of those shareholders who were willing to sign irrevocable commitments.”

However, Hedin refused to get involved, which insiders say led to the end of talks with Lithia.

The Scandinavian group’s renewed interest in acquiring its British rival sparked the intriguing prospect of a return to Pendragon for Trevor Finn, the company’s founder, who was ousted in 2019.

Mr. Finn joined the Hedin Board of Directors last year.

Hedin is said to be advised by Deutsche Bank while Jefferies advises Pendragon.

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The London-listed company, like many of its peers, has had a choppy time during and since the pandemic, as its shares closed at 10.7pm on Friday, giving it a market value of just £317million.

Hedin’s existing stake in Pendragon shares means it would need to raise around £300m to fund the takeover of the company.

Like many of its competitors, Pendragon received tens of millions of dollars in holiday pay from the government during the pandemic.

The company operates more than 150 dealerships across the UK, with other brands in its portfolio including CarStore.

The recent bidding interest in Pendragon comes at a time when the way new and used cars are sold has changed significantly and the companies selling them are experiencing hectic corporate activity.

In January, Constellation Automotive, the private group behind WeBuyAnyCar and Cinch, bought nearly 20 percent of public dealer group Lookers.

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That nosedive came shortly after Constellation, which is valued at multibillion pounds, agreed a £200m takeover of Marshall Motor Group, another physical car dealership.

Pendragon himself made an attempt to buy Lookers, his embattled rival, at the height of the pandemic, but was rebuffed.

In recent years the industry has shifted its focus to using technology to enhance the car buying experience, with both Cinch and its New York-listed rival Cazoo pouring tens of millions of pounds into brand building through sports sponsorship deals.

Pendragon has cut 1,800 jobs and closed 15 retailers since the pandemic began.

On Sunday, Pendragon declined to comment, while Hedin did not respond to a request for comment.

Sky news

(c) Sky News 2022: Car dealer Pendragon is preparing for a £400m bid from a top investor

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