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Shares in the Pendragon car dealership group dropped almost 7 per cent after one of three bidders interested in buying the business decided to pull out of the running.
Nottingham-based Pendragon said Sweden’s Hedin Mobility Group and Leicester-based PAG International – which owns the prestige Sytner dealership brand – had decided to withdraw their joint offer.
Shares in Pendragon – which owns Evans Halshaw and Stratstone and the CarStore online shop – have doubled in the past couple of months in light of separate bids for the business. They dropped to around 33p this afternoon.
Hedin and PAG had made two unsolicited bids for the group, initially offering 28p a share, then upping that to 32p a share which valued the business at almost £450 million.
Today Pendragon said: “Hedin and PAG confirm that they do not intend to make an offer for Pendragon.”
Pendragon still plans to sell off its Evans Halshaw and Stratstone dealerships and its CarStore business to America’s Lithia Motors – and roll out its dealer management software arm Pinewood, to Lithia’s 50 UK sites and North American operations – in a £397 million deal.
Lithia initially offered £280 million, but raised its bid in light of the competition.
Last week, multi-billion dollar Florida-based car retailer AutoNation Inc also threw its hat into the ring, offering 32p a share – almost £450 million.
Despite its agreement with Lithia, the Pendragon board said it would consider the AutoNation proposal and consult with shareholders before providing an update.
Pendragon has 134 franchises and 12 used cars dealerships as well as its dealer management software arm, which would become its main business if it sold off its forecourts.
Last week it announced underlying pre-tax profits for the first half of 2023 of £36.7 million – up from £33.5 million.
Like-for-like revenues for the group – which includes Stratstone, Evans Halshaw and Carstore – were up more than 15 per cent at £2.09 billion.
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