- Pendragon shares fell 8.7% after AutoNation announcement
- Hedin Mobility Group and Penske also recently dropped out of the bidding race.
- Now, AutoNation’s withdrawal leaves Lithia’s offer as the only one left on the table
Auto retailer AutoNation has dropped out of the race to acquire Pendragon, owner of Stratstone and Evans Halshaw.
The Florida-based company sparked a three-way bidding war when it launched a 32p-a-share takeover bid for one of Britain’s few remaining car dealerships three weeks ago.
This came after Lithia Motors, North America’s largest vehicle retailer, agreed to buy Pendragon’s UK motoring and leasing operations 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Withdrawal: AutoNation has withdrawn from the race to acquire Stratstone owner Pendragon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 counterproposal valuing the entire company at £447m.
Although the pair later sweetened their offer, they ultimately abandoned their intention to acquire the company, marking Hedin’s third failed takeover attempt at the company since last year.
The Sunday Times reported earlier this month that AutoNation, led by Britain’s Michael Manley, was considering raising its offer, with sources saying it had enough cash reserves for a bid of 38 pence per share.
But it has now also withdrawn from the process, leaving Lithia’s proposal (35.4p per share) as the only one still on the table.
Manley said: ‘[Pendragon’s] The assets presented AutoNation with a potential opportunity to expand into a new market. However, after further consideration of the opportunity, we 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 expand our portfolio of businesses in a meaningful and synergistic manner and create value for our shareholders.”
pendragon shares fell 8.7 per cent to 31p following the announcement, making them the biggest faller on the FTSE All-Share index.
The company’s investors will vote on the deal with Lithia on October 18, with approval requiring a simple majority.
If that were to happen, Pendragon would be renamed Pinewood Technologies and Lithia would become the UK’s second-largest car dealer by annual revenue, just behind 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.