Pendragon shares slumped over six per cent this afternoon after a joint takeover bid for the company was taken off the table.
Hedin Mobility Group and Penske Automotive Group confirmed on Wednesday afternoon they do not intend to make an offer, ending their part in a three-way bidding war for one of the UK’s largest car dealerships.
Pendragon in September agreed to a proposed £250m sale of its UK motor business with US dealer giant Lithia Motors – a deal backed by 29 per cent of its shareholders.
But the Swedish group Hedin, which holds a 27 per cent stake in Pendragon and employs its former chief executive Trevor Finn, soon allied with Penske Automotive to make a counter offer.
Last week, the American car retailer Autonation joined the fray, putting in a bid for Pendragon valued at £447m and teeing up a three-way battle.
That renewed interest prompted Lithia on Monday to sweeten its offer for Pendragon to 35.4p, in a move valued at £397m.
A shareholder vote is expected on Friday this week to decide the firms’s future, with Lithia’s deal proposing to break up the business.
The partnership between PAG and Hedin had been aiming to to convince the board of Pendragon to back their bid instead.
Autonation’s offer is still on the table, although what Pendragon would look like under that deal remains unclear.
There are currently only two other listed dealerships left in Britain, Vertu Motors and Caffyns, a much smaller company with sites across Kent and Sussex.