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Pendragon PLC on Friday said a ‘large international corporate’ bidder for the car dealership chain has decided against pursuing takeover talks, following ‘a period of due diligence’.
Shares in the Nottinghamshire-based car dealership chain were up 8.4% to 23.30 pence each in London on Friday morning.
The potential suitor, which wasn't named, had made a bid of 29p per share. This would value Pendragon's share capital at £405.1 million.
Pendragon said the proposal received ‘strong support’ from four out of its five largest shareholders. However, the company was unable to engage with one of these shareholders and therefore, given this lack of certainty, the bidder has withdrawn its non-binding offer and both parties have terminated discussions.
In March, Sky News reported that Pendragon had rejected a £400 million takeover approach from 27% shareholder Hedin Mobility Group AB.
According to Sky, Hedin, a Swedish firm that operates more than 200 vehicle showrooms in Belgium, Norway, Sweden and Switzerland through its subsidiary Hedin Bil, had tabled a secret 28p offer.
Pendargon added on Friday that it is trading in line with the board's expectations.
Back in July, Pendragon had said it expects to report pretax profit in the first six months of 2022 of £33 million, down 6.0% from £35.1 million a year before. It explained that new vehicle volume continued to be hurt by supply constraints, with the wider market down 12% during the first half of the year.
‘The board has full confidence in the company's strategy and in management to continue to deliver significant value for all stakeholders,’ Pendragon said on Friday.
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