26 September 2022

European dealer group Hedin has made a 29p-a-share takeover bid for Pendragon. The £400 million bid matches the one supported by the UK group’s board earlier this year understood to have been made by US firm Lithia Motors.

The offer was confirmed by the listed company in a stock market statement this morning (26 September 2022), following rumours over the weekend.

The statement said: “The board of Pendragon is currently considering the proposal together with its financial and legal advisers. Shareholders are urged to take no action at this time. There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made. A further announcement will be made if and when appropriate.”

The statement described the cash offer as an “unsolicited, preliminary and highly conditional proposal”.

Hedin Mobility Group, founded by Anders Hedin, is Pendragon’s largest shareholder and had previously made a 28p-a-share offer in March, but blocked the 29p offer from Lithia in July.

At 29p a share, Pendragon would be worth around £411 million.

Pendragon’s top five shareholders are Hedin Group, Schroder Investment Management, Odey Asset Management, Briarwood Chase Management and Hosking Partners.

Two industry experts told Auto Retail Agenda they believed Hedin was the likely shareholder blocking the Lithaia deal. However, at the time Anders Hedin and Hedin Group did not respond to Auto Retail Agenda’s questions.

Hedin Group holds 26.3% of Pendragon shares. However, founder Anders Hedin also has an additional personal stake in the firm, which takes his total interest to 27.1%.

Hedin Group reportedly made a 28p a share offer for Pendragon in March but was turned down by the board. At the time, it was understood Hedin was considering a further bid.

Auto Retail Agenda sources claim relations between Anders Hedin and Pendragon CEO Bill Berman (pictured) are not as good as Berman’s relations with Pendragon’s other major shareholders.

Trevor Finn, Pendragon’s founder who left the business in 2018, has been linked to the Hedin business in Scandinavia, which has led to speculation Finn could make a return to UK auto retail. However, Auto Retail Agenda sources said it is unlikely he will be involved in the Pendragon bid but will continue to advise Hedin in Europe.

Hedin Group operates more than 200 dealerships across Sweden, Norway, Belgium and Switzerland.

The offer follows Pendragon’s H1 results revealed last week.

UPDATE 16:00, 26 September, 2022: Hedin Group has stated it will not consider selling its shares in Pendragon to any other potential bidders. In a stock market announcement the European dealer group said: “Hedin Mobility believes in the long term potential of Pendragon and will not consider or accept any other offers for its current shareholding in Pendragon.

Hedin now has until 24 October to make a firm offer for the rest of Pendragon.

UPDATE: 16:00, 27 October, 2022: Pendragon’s board looks as if it will try to fend off Hedin’s 29p-a-share offer after issuing a statement claiming that the potential buyer would look to sell-off the group’s Pinewood dealer management system division.

Pendragon said is would be conducting a new strategic review of the firm to maximise shareholder value, adding: “The Pendragon business is made up by its market-leading Evans Halshaw and Stratstone brands, an omni-channel used car offering, a highly differentiated SaaS dealer-management division and a highly profitable and cash generative leasing business. The Board remains excited about the future prospects for all parts of the Company.

“However, in light of the possible cash offer from Hedin Group which the Board is currently considering together with its financial and legal advisers, the Board will consider all options in order to maximise shareholder value. This review will include potential options with respect to each major Pendragon business, in part as a result of an indication from the Hedin Group outlined in their proposal, that it is not their intention to retain the Pinewood SaaS division for the long term and would seek an appropriate partner for the Pinewood business.”

UPDATE: 18:00, 28 Ocotber, 2022: Hedin has responded to Pendragon’s strategic review by changing its position over not accepting any other bid. Hedin has now said it would accept a firm offer for Pendragon from a third party of 35p-a-share.

Tags: Anders Hedin, Bill Berman, Hedin, Pendragon