Pendragon: Car dealership’s profits leap as it finds itself in three-way bidding war
Car dealership Pendragon has posted higher half-year profits as the group finds itself at the centre of a three-way takeover tussle.
Its half-year figures, which come just hours after it revealed a rival bid approach from US car retail giant Autonation, show pre-tax profits rising 10.6 per cent to £36.4 million in the six months to June 30.
The owner of the Stratstone and Evans Halshaw dealership brands said like-for-like revenues lifted 15.5% in a “strong” first half, which it said came “despite what remain challenging economic conditions, with pressure from higher interest rates and ongoing elevated levels of cost inflation”.
On Tuesday evening, Pendragon said Autonation had put in an unsolicited takeover proposal worth around £447 million or 32p a share in cash.
Pendragon had said last week that it would sell its UK motor and leasing businesses to US motor group Lithia Motors for £250 million, valuing Pendragon at 27.4p a share.
But Pendragon shareholder Hedin, which owns a 28% stake, then launched a joint unsolicited bid with Penske, which owns Britain’s bigger motor dealer, Sytner.
Pendragon rejected an initial 28p a share approach from the pair but then received a further proposed bid worth 32p a share and said it would consider the sweetened offer.
The offer from Autonation has matched the latest offer from Hedin and Penske and is also in cash.
On Wednesday, Pendragon said it was looking at all three proposals “in consultation with shareholders”.
“We will provide a further update at the appropriate time,” it added.
Autonation is the largest car dealer in the US, with a Nasdaq stock market valuation of around 25.8 billion US dollars (£20.8 billion).
It was founded by entrepreneur Wayne Huizenga in Florida in 1996 and has grown to span about 300 dealerships across America.
The bidding battle marks the culmination of a lengthy period of takeover interest for Pendragon.
It was approached by Swedish motor company Hedin Group last September with a possible takeover offer worth £400 million, or 29p per share.
The group, owned by Anders Hedin, was handed an extension to firm up a bid but it did not result in a sale.
It came after Pendragon was forced to reject a bid of more than £400 million from an unnamed international company in August last year after being unable to get hold of one of its biggest shareholders.
It said at the time that it had managed to get the support of four of the five shareholders but could not get through to the fifth.
Press Association – Holly Williams