Bid target Pendragon reports solid H1 as AutoNation joins the fray

Bid target Pendragon on Wednesday reported an 10% increase in underlying first-half profits as it received yet another takeover offer – this time from US car retail giant AutoNation.

The company just two weeks ago agreed a £250m sale of its UK car dealerships to US group Lithia Motors, after which it would formerly rebrand as Pinewood Technologies, a listed company focused exclusively on dealer management software. It also signed a partnership with Lithia to accelerate Pinewood's growth across North America.

Since then, it has received unsolicited proposals from a number of parties to counter that deal: firstly, Hedin Mobility and Penske jointly offered 28p per share, which was swiftly increased to 32p after being rejected by the board; then late on Tuesday, AutoNation matched that offer. The offers value Pendragon's entire business at £447m.

Adding more complexity to the story, Pendragon's chief executive Bill Berman spent over two decades at AutoNation, most recently as president and chief operating officer (until 2017).

Meanwhile, Hedin had previously offered £400m to take over the whole business last year but the deal collapsed in December 2022 after the buyer cited "challenging market conditions".

Pendragon's board said it is still considering both new proposals and will consult with shareholders.

In the six months to 30 June, the company delivered sales of £2.09bn, up 13.2% year-on-year, with "broad-based growth" across all divisions. Underlying pre-tax profit rose 9.6% to £36.7m.

The Pinewood division, which currently only accounts of a small fraction of the Pendragon business, saw revenues jump 16.9% to £14.5m, as total users rose 7% to 32,800 and recurring revenue per user rose 7%.

Pendragon's stock was up 10% at 32.73p by 0830 BST, having risen by 72% over the past month alone.