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AutoNation Enters Bidding War for Pendragon, Challenging Lithia Motors

AutoNation Joins Bidding War for Pendragon

AutoNation Enters the Race to Acquire Pendragon

AutoNation Inc. has joined the competition to acquire Pendragon, a major auto retailer in the United Kingdom. Just a week ago, it seemed that Pendragon would be sold to Lithia Motors Inc.

In a recent regulatory filing, Pendragon announced that it received an unsolicited proposal from AutoNation offering to purchase the company for 32 pence (39 cents) per share in cash.

AutoNation confirmed in its own regulatory filing that it submitted a non-binding preliminary proposal for Pendragon. However, it stated that there is no certainty as to whether it will make a binding offer for the company.

AutoNation has stated that it will provide further updates when appropriate.

According to Reuters, the value of AutoNation’s offer is estimated at $544.2 million.

Pendragon’s board will consider the proposal and provide an update in due course.

Other Bidders in the Running

Lithia Motors Inc. previously announced its plan to acquire Pendragon’s dealership and fleet businesses for $350 million. As part of the deal, Pinewood, Pendragon’s dealership management system, would be transformed into a standalone software company called Pinewood Technologies. Lithia would also gain a one-sixth ownership stake in the new entity and form a joint venture with Pinewood to introduce a dealership management system to North America.

Additionally, Penske Automotive Group Inc. and Hedin Mobility Group submitted a joint offer to buy Pendragon, which was initially rejected. However, they later revised their offer, increasing the price from 35 cents to 39 cents per share. Pendragon is currently considering this proposal.

Implications for the Industry

If AutoNation’s bid is successful, it will become the fourth publicly traded auto retailer with dealerships in the U.K., joining Lithia, Penske, and Group 1 Automotive. Pendragon operates 160 retail locations across the U.K., primarily consisting of new-vehicle dealerships.

AutoNation, based in Fort Lauderdale, Florida, is ranked No. 2 on Automotive News’ list of the top 150 dealership groups in the U.S., with retail sales of 229,971 new vehicles in 2022. Lithia and Penske hold the first and third positions, respectively.

Mark Hollmer and Reuters contributed to this report.

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