The price of Lithia’s offer to acquire rival Pendragon’s UK auto and leasing company has increased. It comes amid a three-way bidding war between AutoNation in the United States and Hedin in Sweden, which already has a 28% share in Pendragon.
However, Pendragon reported last month that it had agreed to sell the UK dealership division for a little over 280 million dollars to Lithia.
However, AutoNation submitted an unsolicited buyout offer last week for the entire company for £447 million in cash. Then, Hedin, which holds a 28% share, and Penske, which owns Sytner, the largest auto dealer in Britain, jointly made an unsolicited offer. Pendragon first turned down the pair’s initial approach, but after receiving a revised offer, it stated it would consider the enticing offer.
On October 2, Lithia announced that it had improved its £397 million offer for the UK operation.
Along with entering the U.S. market, Pendragon would also roll out its Pinewood dealer management software division to Lithia’s UK locations. Additionally, the company would adopt Pinewood Technologies’s moniker while keeping its London Stock Exchange listing.
The requirement for 75% of shareholders to approve a comprehensive takeover has thwarted efforts by AutoNation and Hedin. However, the Lithia acquisition can move forward with a majority of votes.
President and CEO of Lithia, Bryan DeBoer, stated: “We have a pathway to complete the transaction quickly, demonstrated expertise in effectively merging firms, and fantastic growth potential for the Pendragon people.” He continues, “We are very excited about the strength of our strategic partnership and expanding the Pinewood business not just in the UK but around the world.”