Eyes now on AutoNation for Pendragon counter-bid

Reports suggest that America's AutoNation car dealer group is considering increasing its bid for Pendragon to snatch it from rival Lithia Motors.

Mike Manley (pictured), the British-born chief executive of AutoNation, has not ruled out revising its earlier 32p per share bid which was rejected by Pendragon's board, according to The Sunday Times.

The publication reports that city sources told it AutoNation has the cash reserves to pay as much as 38p per share for Pendragon, which would value the AM100 dealer group at more than £500 million.

It said such an offer would likely cause the Pendragon board to abandon its recommendation for the Lithia bid, which aims to acquire all Pendragon's motor businesses but leave its software company, Pinewood Technologies.

The Lithia bid, which is valued at £397m, is the only one officially on the table still, after Hedin Mobility and Penske Automotive Group dropped their joint bid for Pendragon last week.

Hedin is Pendragon's largest shareholder, having built up a 28% stake, and it had made previous unsuccessful attempts last year to acquire the AM100 dealer group - it went on to acquire the greater London businesses of Mercedes-Benz Retail Group and BMW retailer Stephen James Group.

Pendragon chief executive Bill Berman knows AutoNation well - he was its president and chief operating officer when he left it in 2017 after 20 years with the group.