- Pendragon shares slumped 8.7% following the announcement by AutoNation
- Hedin Mobility Group and Penske also recently dropped out of the bidding race
- Now, AutoNation’s withdrawal leaves Lithia’s offer the only one still on the table
Motor retailer AutoNation has pulled out of the race to acquire Stratstone and Evans Halshaw owner Pendragon.
The Florida-based company set up a three-way bidding war when it pitched a 32 pence per share takeover offer for one of Britain’s few remaining listed car dealers three weeks ago.
This followed Lithia Motors, North America’s largest vehicle retailer, agreeing to buy Pendragon’s UK motor and leasing operations for £280million.
Withdrawal: AutoNation has pulled out of the race to acquire Stratstone owner Pendragon
Hedin Mobility Group – Pendragon’s largest shareholder – and Penske Automotive Group responded soon afterwards with a joint counter-proposal valuing the whole firm at £447million.
Although the pair subsequently sweetened their offer, they eventually dropped their pursuit of the company, marking Hedin’s third failed takeover approach for the business since last year.
The Sunday Times reported earlier this month that AutoNation, led by British-born Michael Manley, was considering upping its offer, with sources claiming it had enough cash reserves for a 38p-per-share bid.
But it has also now withdrawn from the process, leaving Lithia’s proposal – 35.4p per share – the only one still on the table.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 opportunity, we decided not to make a formal offer.
‘AutoNation will continue to leverage M&A, which may include opportunities within and outside the US, to expand our business portfolio in a meaningful and synergistic way, and to create value for our shareholders.’
Pendragon shares slumped 8.7 per cent to 31p following the announcement, making them the biggest faller on the FTSE All-Share Index.
The firm’s investors are set to vote on the Lithia deal on 18 October, which requires a simple majority to pass.
Should that happen, Pendragon would be renamed Pinewood Technologies, and Lithia would become the UK’s second-biggest automotive dealer by annual revenue, just behind Penske-owned Sytner Group.
When the initial takeover approach was announced in September, Lithia’s chief executive, Brian De Boer, said it would help expand Pendragon’s software-as-a-service business and its reach through 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.