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Pendragon PLC on Wednesday said it had unanimously rejected an unsolicited and preliminary proposal from Hedin Mobility Group AB and PAG International Ltd to jointly acquire the company. The 28 pence per share proposal, which would value the firm at around £391 million, is subject to the completion of due diligence and external debt financing. Shares in Pendragon rose 14% to 26.92p in London on Wednesday. ‘The board carefully considered the proposal, including taking advice from its advisers, and concluded that it fundamentally undervalues the company and is therefore not in the best interests of shareholders or other stakeholders,’ Pendragon said in a statement. Hedin Mobility is a Molndal, Sweden-based, European mobility enabler operating in fourteen countries, while PAG International is part of Penske Corp, an American diversified transportation services company. The company said it was excited about the future prospects for Pendragon as a result of the transaction announced with Lithia Motors which, if completed, will deliver a substantial cash dividend and create a pure play software as a service business with an accelerated growth plan and a strategic partnership to enter North America. On Monday, Pendragon said it had agreed to sell its entire UK motor business and leasing business to Lithia Motors, its North American rival. The Nottingham, England-based automotive retailer said it will sell Pendragon NewCo 2 Ltd, its entire UK motor business and leasing business, to Lithia UK Holding Ltd. Lithia UK Holding is a subsidiary of Lithia Motors. The UK motor business consists of Evans Halshaw, Stratstone & Car Store, and Pendragon Vehicle Management. The arm will be sold at an ‘attractive valuation’ of £280 million, Pendragon said. This includes a £30 million subscription for shares in Pendragon. In aggregate, Pendragon shareholders will initially receive (either directly through the transaction dividend or via their retained interest in Pendragon) the equivalent of around 27.4p per share with further significant upside expected from the strategic partnership, it said. Hedin and Penske have until October 18 to announce a firm intention to make an offer for the company in accordance with takeover rules. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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