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Has been reported in The Sunday Times according to CITYA.M.
''Last week Lithia Motors sweetened their offer to 35.4p in a move that valued the Pendragon unit at £397m. The scrap over Pendragon comes at a time when overseas interest in UK car dealerships has spiked dramatically. Mike Manley, the chief executive of Autonation, has not ruled out increasing the firm's bid for the Pendragon unit & it's also reported the company had the cash reserves in place to top up it's offer if it needed to. ''
Autonation pulled out this evening
A disappointing outcome. I had hoped we would have had a bidding war, but it has all ended in a damp squib.
PDG has always had the ability to disappoint and even at the bitter end it still delivers.
Lets hope Pinewood is warmly received by the market, so what we "lost" in the bidding war, we gain on the SP of Pinewood.
I note Berman gets a nice payday! Assuming it goes through of course.
No bidding war sadly but attention should now focus on the value in the N.American JV which surely has to be considerably more than the 0.6p we are held to believe
in simple terms we know Lithia spend $100m now. The JV is on arms length but say they get the $100m down to $80m by using Pinewood. There will be minimal associated sales costs obviously but some management/service costs on those users. So the JV should deliver $60m+ of EBIT (allowing for some sales staff to target non Lithia) of which we have 49%. Put that on 15x EBIT given the opportunity to grow it outside Lithia and our 49% is worth $450m ie. 22p a share on the new share count. The road to the $60m is visible pretty quickly too- the published docs demonstrate the two firms want to get on with the customisation process to ready the package for the US. The rollout is targeted to be done within 18mths. I have seen a JPM note that says Lithia spends $150m per annum on the stuff PW does so my numbers could be way low
PS. you will note that in 2019 PW delivered the same EBIT more or less as now but on revenue of £16m not the £27m we have now -ie. we have put in huge operating costs to build out the product and move into new geogs since then implying the product really has minimal running costs to serve . 2019 saw £18.3m rev and £13.4m operating profit which included a small head office allocation
PPS. the market may have missed that in Lithia's own announcement re its increased bid it noted that it has already secured 7,500 additional potential UK users contingent on this deal going thru. This is pretty amazing and at 90% GM, this could drop £5m thru to the bottom line in short order
Having watched the share price collapse after the last bid fiasco I decided to sell a third of my holdings this time when it hit 35p. When a bidding war seemed on the cards I thought that looked a big mistake, I am now not so sure it was. Bought at 12p so a decent profit anyway.
Sell all PDG now, We all know for the last 30 yrs or so, PDG have a habit of crashing when u least expect it,
Stop living on dreams and hopes. Stick with the here and now, the reality.
Then if still interested, Buy pinewood when it floats.
Bag any PDG profits now b4 too late,
PDG is starting to slide again now and SADLEY its only a 1 horse race now. (Lithia)...
TYPICAL of PDG to disappoint shareholders, IF ITS TOO STRESSFUL, Sell Now.
I sold 50% of mine 2m ago at 33.5p, My ave cost was 17.2p,
But soon after that when Hedin pulled out, I totally chickened out and sold ALL my shares, I hold zero PDG now.
Hedin pulling out made me worried that another one will pull out, and they have done !,
So, i bagged my profits and run so to speak, keeping my eye on the sp tho.
Does make me wonder if these companies are playing the markets tho!!
The only thing consistent about PDG is constant disappointment
As Fergusson would say "It's squeaky bum time"!