Shares in Pendragon lost more than a quarter of their value yesterday after a European suitor said it will not make a takeover bid for the owner of the Evans Halshaw chain of motor dealerships.
Sweden’s Hedin Mobility said it will not make an offer for Pendragon, having mooted in September a potential deal valuing the UK group at about £400 million. Hedin – which operates more than 200 showrooms across Belgium, Norway, Sweden and Switzerland – is Pendragon’s largest shareholder with a stake of nearly 28 per cent.
“Given the challenging market conditions and uncertain economic outlook, Hedin confirms that it does not intend to make an offer for Pendragon,” the company said.
READ MORE: Leading dealer Pendragon says new car shortages to persist into next year
Pendragon, which also owns the Stratstone and Car Store brands, gave Hedin access to its books in October as it sought to firm up a possible cash offer of 29p per Pendragon share. However, the Swedish group has decided not to proceed because of the uncertain economic outlook.
Pendragon said it remains confident in its long-term prospects:”This process has highlighted the value of Pendragon and the board will continue to explore opportunities to maximise value for its shareholders.
READ MORE: Luxury car dealer considers 'highly conditional' offer from European rival
“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.”
In October, the Nottingham-based group reported a fall in underlying profits to £14.7m for the third quarter as it absorbed higher operating costs and interest rate charges. This was despite elevated prices for new and used vehicles.
Shares in Pendragon closed 8p lower yesterday at 20.2p.
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