Pendragon shares slip after Hedin puts the brakes on takeover offer

Hedin Mobility Group and PAG International confirmed that they do not intend to make an offer for the business.

Shares in car dealership group Pendragon have slipped after a potential takeover was ditched (Stefan Rousseau/PA) (PA Archive)

Shares in car dealership group Pendragon have slipped after a potential takeover offer was taken off the table.

Hedin Mobility Group and PAG International confirmed that they do not intend to make an offer for the business.

Pendragon said last month that it had agreed a deal worth about £280 million, or 27.4p per share, to sell the UK dealership operation to US firm Lithia Motors.

But following the announcement, Pendragon said it had received unsolicited takeover proposals from US car retail giant AutoNation, and Sweden’s Hedin in partnership with PAG, a subsidiary of Penske.

Hedin, which already owns a 28% stake, launched the bid with PAG – which owns Britain’s biggest motor dealer, Sytner.

The three-way bidding battle prompted Lithia to increase its offer to 35.4p per share, worth about £397 million, in an attempt to sweeten the deal.

The Lithia deal would see Pendragon roll out its dealer management software arm, called Pinewood, to Lithia’s UK sites and to enter the North American market.

The firm would remain listed on the London Stock Exchange and change its name to Pinewood Technologies.

Last month, Pendragon said Lithia was “perfectly placed” to build on the expansion of the group.

Meanwhile, AutoNation’s possible offer is worth about £447 million to buy the whole company.

Hedin and PAG’s decision to walk away from the takeover race saw shares in Pendragon tumble by more than 7% on Wednesday afternoon.