Steve Young, managing director of ICDP, an European research and consultancy business in the U.K., told Automotive News in an email that it appears Hedin didn’t have the firepower to do the deal alone.
“If the bid succeeded, not sure how they [Hedin and Penske] would proceed afterwards — perhaps divide Pendragon up and go their separate ways,?” Young wrote.
The joint offer from Hedin and Penske is in line with Hedin’s bid from last year, Young noted.
Hedin appears to have played a role in Lithia backing away from a possible deal for Pendragon last year.
In August 2022, Pendragon in a regulatory filing said a “large international corporate” entity presented “a board-approved nonbinding offer” for the dealership group that was later withdrawn. The bid was valued at $558.35 million at the time, according to a Reuters report.
A Sky News report named Lithia as the unidentified bidder.
That proposal to buy Pendragon was contingent on receiving irrevocable commitments from each of the company’s five major shareholders, the U.K. retailer said in its filing then. However, Pendragon said it was unable to engage with one of the shareholders, which Sky News identified as Hedin.
DeBoer confirmed this week that Lithia had discussions then with Pendragon, adding that his company backed away.
Young said he thinks the Pendragon-Lithia deal could go through.
“Given that the asset sale agreed with Lithia and the other institutional investors holding over 30 percent have indicated acceptance, I think the original Lithia bid and spinoff of the Pinewood business still stands a good chance of success,” Young wrote.
Penske, of Bloomfield Hills, Mich., ranks No. 3 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 185,831 new vehicles in 2022. Lithia ranks No. 1 on that same list, retailing 271,596 new vehicles last year.
— Reuters contributed to this report.