Swedish car retailer Hedin Mobility Group has withdrawn its £411 million takeover offer for Pendragon due to “challenging economic conditions”.
A statement issued via the London Stock Exchange this morning (December 9) brought the business’ latest bid to buy the one-time AM100-topping car retail PLC to an end, following an earlier bid at the start of 2022.
Withdrawing the 29p per share offer on the final day of its recently-extended “put-up or shut-up” deadline, the statement issued on behalf of Hedin said: “Hedin Mobility Group has said it does not intend to make an offer for the car retail giant behind the Evans Halshaw and Stratstone brands due to challenging market conditions and an uncertain economic outlook.”
Hedin’s apparent uncertainty comes just a fortnight after it completed the acquisition of Mercedes-Benz Retail Group’s four remaining premium car dealerships in Greater London to enter the UK market for the first time.
It was a move that also signalled OEM-owned MBRG’s exit from the car retail sector following a series of disposals, ahead of the German brand’s adoption of an agency model retail strategy in 2023.
Hedin boss Ander Hedin remains Pendragon’s largest shareholder.
AM’s November edition featured an in-depth look at the UK car retail sector’s M&A outlook and its growing appeal to foreign investors.
Despite Hedin withdrawing the takeover offer it tabled in September, Pendragon said its board “remains confident” about the company’s long-term prospects.
In a separate statement to the London Stock Exchange, it said: “This process has highlighted the value of Pendragon and the board will continue to explore opportunities to maximise value for its shareholders.
“As announced on 25 October 2022, there is a clear path to deliver the strategy to transform automotive retail through digital innovation and operational excellence.
“The economic backdrop remains challenging; however, the board continues to expect to deliver group underlying profit before tax in line with expectations for the current financial year.”
Pendragon revealed details of a new growth plan under chief executive Bill Berman back in September 2020, targeting an underlying profit before tax of £85m to £90m by 2025.
Since then it has cut its workforce and re-launched its CarStore used car retail division.
In September, the group’s H1 results revealed a 4.6% decline in pre-tax profit, to £33.5 million (H1 2021: £35.1m) as revenues rose by 1.6% to £1.85bn (H1 2021: £1.82bn) – up 3.9% on a like-for-like basis.
The result came after a record-breaking 2021 performance which generated an underlying profit before tax of £83 million – ten times the £8.2m achieved in a COVID-impacted 2020.