Sunday 08 October 2023 4:53 pm

Autonation mulls upping rival offer for Pendragon unit as bidding war intensifies

Transport Reporter

One of the largest car dealerships in the US is reportedly considering increasing its bid for Pendragon’s forecourts and leasing business.

Mike Manley, the chief executive of Autonation, has not ruled out increasing the firm’s bid for the Pendragon unit, The Sunday Times reported, citing City sources. The report added that the firm had the cash reserves in place to up its offer if it needed to.

Pendragon agreed to sell its British motor dealership for £250m with US-based Lithia Motors in September – a deal backed by 29 per cent of shareholders.

But it has since become the subject of a protracted three way bidding war after Autonation and a joint partnership between Sweden’s Hedin and Penske Automotive submitted separate counter offers.

Penske and Hedin, which holds a 27 per cent stake in Pendragon, took their offer off the table on Wednesday however, leaving Autonation as the last firm standing in the way of Lithia.

Last week, Lithia sweetened its offer to 35.4p in a move that valued the Pendragon unit at £397m.

The scrap over Pendragon comes at a time when overseas interest in UK car dealerships has spiked dramatically.

EY research found there were around 20 overseas investments into UK dealerships in the decade prior to 2019, while in the three years post-Covid have already seen at least 10, largely due to a weakened pound.

Lithia bought British luxury car dealer Jardine Motors in a £300m deal in March, while Lookers looks set to be picked up by Canada’s Alpha Auto Group.

Autonation was approached for comment.