The boss of one of Britain’s biggest motor dealers will be expected to explain why he rejected a £400 million takeover attempt by one of its largest shareholders when he delivers full-year results tomorrow.
Shares in Pendragon jumped by more than 20 per cent yesterday after it emerged at the weekend that Hedin Group had tabled a 28p-a-share offer for the London-listed dealership weeks ago.
Pendragon, owner of the Stratstone, Evans Halshaw and CarStore chains, has about 150 outlets. Sweden’s Hedin Group, which has a similar number of car showrooms in Belgium, Norway, Sweden and Switzerland, has owned a stake in Pendragon since 2019 and became the largest shareholder last October, with a 26.2 per cent stake.
Neither Pendragon nor Hedin Group commented on weekend reports by Sky News but shares in Pendragon still rose by 4¾p, or 22.1 per cent, to close at 26½p, valuing the company at £365.1 million.
Bill Berman, the chief executive, has been trying to reduce a bloated cost base and modernise the company. As well as making 1,800 redundancies and shutting 15 showrooms in the past year the company has been helped by a significant surge in car prices due to the scarcity of new and second-hand cars.
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A shortage of microchips and other components required in the manufacturing of modern road vehicles has led to a supply squeeze.
Pendragon will reveal its full-year results tomprrow after raising pre-tax guidance in December to £80 million, nearly double the amount it had expected last year. However, analysts will be putting pressure on the company to detail its outlook for the year and whether its profits boom will be sustainable or not. Some analysts expect Pendragon’s profits to halve this year.
Berman, 55, who joined the board in 2019, has already been the target of successive shareholder revolts over his pay. Hedin said last year that Berman’s bonus was “out of tune”, particularly as the company had taken £42 million of furlough support on top of business rates relief from the government. More than 40 per cent of Pendragon’s investors voted against the company’s pay resolutions last year.
The takeover approach by Hedin is particularly eyebrow-raising as Trevor Finn, the founder of Pendragon, who was ousted in 2018, is now a non-executive director of the Swedish company.
