- Shares of Pendragon fell 8.7% after AutoNation’s announcement
- Hedin Mobility Group and Penske also recently withdrew from the bidding race
- Due to AutoNation’s withdrawal, Lithia’s offer is the only one left on the table
Car retailer AutoNation has withdrawn from the race to acquire Stratstone and Evans Halshaw owner Pendragon.
The Florida-based company sparked a three-way bidding war when it made a 32 pence-per-share takeover bid three weeks ago for one of Britain’s few remaining listed car dealers.
This followed Lithia Motors, North America’s largest car retailer, agreeing to acquire Pendragon’s UK car and leasing business for £280 million.
Withdrawal: AutoNation has withdrawn from the race to acquire Stratstone owner Pendragon
Hedin Mobility Group – Pendragon’s largest shareholder – and Penske Automotive Group responded shortly afterwards with a joint counter-proposal valuing the entire company at £447 million.
Although the pair subsequently tightened their offer, they ultimately abandoned their pursuit of the company, marking Hedin’s third failed takeover approach for the company since last year.
The Sunday Times reported this earlier this month that AutoNation, led by British-born Michael Manley, was considering raising its offer, with sources claiming it had sufficient cash reserves for a 38 cents per share offer.
But it has now also withdrawn from the process, leaving Lithia’s proposal – 35.4p per share – the only one left on the table.
Manley said: “(Pendragon’s) assets presented AutoNation with a potential opportunity to expand into a new market. However, after further considering the possibility, we have decided not to make a formal offer.
“AutoNation will continue to leverage mergers and acquisitions, which may include opportunities within and outside the U.S., to meaningfully and synergistically expand our business portfolio and create value for our shareholders.”
Pendragon Shares fell 8.7 per cent to 31p after the announcement, making them the biggest fallers on the FTSE All-Share Index.
The company’s investors will vote on the Lithia deal on October 18, which will require a simple majority.
Should that happen, Pendragon would be rebranded as Pinewood Technologies, and Lithia would become Britain’s second-largest car dealer by annual turnover, just behind the Penske-owned Sytner Group.
When the initial acquisition approach was announced in September, Lithia CEO Brian De Boer said it would help expand Pendragon’s software-as-a-service business and its reach in North America.
In March this year, the company completed the purchase of Jardine Motors, known for selling luxury brands such as Aston Martin, Ferrari, Maserati and McLaren.