London-listed car dealer Pendragon, which owns brands such as Evans Halshaw and Stratstone, has received a new £400m takeover approach from its largest shareholder.
Sky News has learned that Hedin Group, which owns about 26% of Pendragon, has submitted an offer of 29p per share to the company.
The approach is expected to be confirmed in a stock exchange announcement on Monday morning.
Led by founder Anders Hedin, through its subsidiary Hedin Bil, Hedin operates more than 200 car showrooms in Belgium, Norway, Sweden and Switzerland.
In recent years, he’s been a vocal critic of Pendragon’s board, especially when it comes to executive pay.
Hedin made an offer at 28p a share this spring, but was rejected by the target company’s board.
However, according to one analyst, Pendragon is expected to start talks with Hedin Group with the latest offer.
The new offer, at 29 pence, is the same value as another bid put forward in the summer by Lithia Motors, a major US car dealership with a market value of over $7 billion.
In a statement confirming its approach in August, Pendragon said Lithia’s proposal was “worthy of engagement with the five largest shareholders, [it had] The proposal received strong support from four of those shareholders who were willing to sign an irrevocable pledge. ”
However, according to insiders, Hedin refused to be involved and talks with Lithia were broken off.
The Scandinavian group’s renewed interest in acquiring its British rival has raised the intriguing prospect of ousted company founder Trevor Finn returning to Pendragon in 2019.
Finn joined Hedin’s board last year.
Hedin is understood to have been advised by Deutsche Bank, and Jefferies has advised Pendragon.
The London-listed company, like many of its rivals, has been through volatile times during and since the pandemic, with shares closing at 22.7 pence on Friday with a market capitalization of just £317m. is staying.
Hedin’s existing interest in Pendragon’s stake means he will need to find around £300m to finance the company’s takeover.
Like many of its rivals, Pendragon received tens of millions of pounds in furlough payments from the government during the pandemic.
The company operates over 150 outlets across the UK and has other brands in its portfolio, including CarStore.
Pendragon’s latest bid interest comes at a time of great change in the way new and used cars are sold and a frenzy of corporate activity among the companies that sell them.
In January, Constellation Automotive, the privately held group behind WeBuyAnyCar and Cinch, bought nearly 20% of listed dealer group Lookers.
That raid comes just after Constellation, with a multi-billion pound valuation, agreed to buy another physical car dealer, Marshall Motor Group, for £200 million.
Pendragon itself made an approach to acquire its beleaguered rival Lookers in the midst of the pandemic, but was rebuffed.
In recent years, the industry has shifted its focus to using technology to improve the car buying experience, with both Cinch and its New York-listed rival Cazoo pouring tens of millions of pounds into brand building through sports sponsorship deals. increase.
Pendragon has cut 1,800 jobs and closed 15 outlets since the start of the pandemic.
Pendragon declined to comment on Sunday, but Hedin did not respond to a request for comment.
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