AutoNation joins Pendragon bidding war

Lithia on Sept. 18 said it planned to buy Pendragon’s dealership and fleet businesses in a $350 million deal. As part of that deal, Pinewood, Pendragon’s dealership management system, would be transformed into a standalone software company called Pinewood Technologies. Lithia would gain about a one-sixth ownership stake in that entity. Lithia and Pinewood plan to form a joint venture to bring a DMS to North America.

Pendragon last week said it is required to hold a shareholders meeting Oct. 6 to approve or reject Lithia’s proposal.

Pendragon is led by CEO Bill Berman, the former AutoNation COO. Under Lithia’s proposal, Berman would stay on as CEO of Pinewood.

Just two days after Lithia’s deal was announced, Pendragon said it received a joint offer from Penske Automotive Group Inc., through its PAG International subsidiary, together with Sweden’s Hedin Mobility Group. Pendragon rejected that deal.

Then, on Friday, Penske and Hedin submitted a revised offer to buy Pendragon, upping the price from the rejected 35 cents per share to 39 cents per share. Reuters valued the second Penske-Hedin bid at about $548 million. Pendragon said it is considering that proposal.

But unlike the Penske bid, AutoNation appears to making its offer alone.

If its bid proves successful, AutoNation would be the fourth publicly traded auto retailer with U.K. dealerships, joining Lithia, Penske and Group 1 Automotive.

Pendragon has 160 retail locations across the U.K., most of which are new-vehicle dealerships.

A Lithia spokesperson declined to comment.

Rob Kurnick Jr., president of Penske Automotive Group, declined to discuss details about Penske’s pursuit of Pendragon.

“Obviously, that’s not something I can talk a lot about,” Kurnick told Automotive News at the Reynolds and Reynolds retail summit event on Tuesday in Indianapolis, where he spoke about other industry trends. But, he noted, Penske operates a large amount of its business in the U.K. and he said that Pendragon “has been around as a peer of ours for a long time.”

“We watch all of those companies very closely,” he said.

AutoNation, of Fort Lauderdale, Fla., ranks No. 2 on Automotive News‘ list of the top 150 dealership groups based in the U.S., with retail sales of 229,971 new vehicles in 2022. Lithia is No. 1 on that list and Penske is No. 3.

Mark Hollmer and Reuters contributed to this report.