Pendragon rejects new £391m bid by Sytner parent and Sweden’s Hedin

Pendragon has unanimously rejected an unsolicited proposal by Hedin Mobility and Penske two days after it declared it was selling its Evans Halshaw, prestige Stratstone dealerships and online CarStore business to US motor retailer giant Lithia Motors in an accepted £250 million deal.

Hedin Mobility Group made a similar offer last year which valued it at more than £400 million that was subsequently withdrawn.

Sytner is the UK’s largest automotive retail group in the UK, has more than 100 dealerships nationwide and its portfolio ranges from Audi and BMW to Ferrari and Lamborghini.

Hedin has been expanding across Europe, buying Toyota and Mercedes dealerships in Belgium, and in Switzerland where it is now the second biggest BMW and Mini dealership

Pendragon's board has already agreed a proposal with Lithia, subject to shareholder approval, which would sell off its leasing and motor dealership businesses to Lithia UK Holding, the UK division of NYSE-listed Lithia.

As part of the accepted offer by Lithia Motors, Pendragon is also planning a partnership to roll out its dealer management software arm, Pinewood, to Lithia’s 50 UK sites and North American operations. If those deals are completed by the end of the year the slimmed-down Pendragon will remain listed on the London Stock Exchange and change its name to Pinewood Technologies.

The acquisition, which follows Lithia's acquisitions of Jardine Motors and Arden Group already this year, would mean Lithia would occupy second spot in the AM100, with a UK business generating more than £5 billion revenues.

In a statement to the London Stock Exchange, Pendragon said that Hedin and US-based Penske had rejected the 28 pence share offer, stating that it fundamentally undervalued the company and was 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.”

.Under market rules PAG and Hedin have until 5pm on October 18 to make a firm offer or stand down.