Pendragon PLC (LON: LON:PDG) is up more than 10% this morning after it received an unsolicited cash proposal from AutoNation Inc (NYSE: NYSE:AN).
Pendragon inked a deal with Lithia Motors last week
The 32 pence a share proposal from AutoNation values Pendragon at about £447 million ($544 million).
Note that the automotive retailer has already signed a deal to sell its U.K. motor and leasing business to the Oregon-headquartered Lithia Motors as of last week.
Still, it’s been receiving unsolicited proposals ever since. PAG International and Hedin Mobility Group sweetened their joint offer this past Friday to 32 pence per share – after Pendragon rejected their initial 28 pence a share offer saying it undervalued its business.
Pendragon shares have nearly doubled over the past two weeks.
Pendragon CEO was previously an AutoNation executive
What makes the offer from AutoNation all the more interesting is the fact that Bill Berman – the Chief Executive of Pendragon PLC has spent more than twenty years at AutoNation in several capacities including President and the Chief Operating Officer.
On Wednesday, the London-listed firm said it will consider the new proposal and consult with shareholders before finalising its decision. Further updates, it added, will be made available at the “appropriate time”.
Also today, Pendragon said a “broad-based growth” delivered a 13.2% annualised increase in its sales in the first six months of this year. The retail firm saw £36.7 million in underlying profit before tax – up 9.6% year-on-year, as per its press release this morning.
Wall Street currently has a consensus “overweight” rating on Pendragon shares.
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