AutoNation on Tuesday rescinded its offer to purchase U.K.-based automotive retailer Pendragon, roughly three weeks after joining a bidding war composed of America’s largest dealership groups.
In late September, AutoNation submitted an unsolicited offer of $544 million to fully acquire Pendragon, which is the U.K.’s second-largest seller of vehicles. The move came shortly after the British company reached an agreement with Lithia Motors to sell its leasing and motor operations for $304 million while declining a joint offer of $486 million from Penske Automotive Group’s global investing company PAG International and Hedin Mobility Group, located in Sweden. After receiving AutoNation’s unexpected proposal and a revised offer from Hedin and Penske, Pendragon said it would consider its new options, although the decision would ultimately be up to its shareholders.
Earlier this month, Lithia raised its offer to $482 million. Included in the deal was an agreement to convert Pendragon’s dealership management system arm, Pinewood, into a subsidiary, Pinewood Technologies. Lithia would own roughly 16% of this new company and help the U.K. retailer bring its DMS to more U.S. dealerships.
Shortly after Lithia’s new proposal, Penske and Hedin dropped out of the bidding war, leaving only AutoNation to pursue a deal. Although the dealership group had another week to decide, the company announced this Tuesday it would also retract its offer. CEO Mike Manley confirmed the decision in a statement, although he noted that AutoNation would continue to explore acquisitions “which may include opportunities within and outside the U.S….” Pendragon shareholders still need to ratify the sale of the business’s operations to Lithia in a vote scheduled next week.