Swedish car retailer Hedin Group could be lining up a second takeover bid for Pendragon after having an initial £400m offer rejected, it has been reported.

Sky News reported that the group, whose owner Anders Hedin became the AM100 group’s biggest shareholder back in October, tabled an offer worth 28p-per-share “several weeks ago” only to see it rejected.

While neither party would comment on the move, the news outlets suggested that a follow-up offer could now be on the cards.

This morning (March 21) shares for Pendragon were valued at 25.8p, their highest level since April 2019 and a near-four-fold rise from 5.2p at the start of the COVID-19 pandemic in March 2020.

Anders Hedin increased his stake in Pendragon to just over 25% of voting rights five months ago.

His investment company, Anders Hedin Invest, now holds more than 350 million shares in Pendragon, making it Pendragon's largest shareholder.

The Sweden-based Hedin Group operates more than 120 dealerships in Sweden, Norway, Belgium, Germany, Denmark and Switzerland, and in January last year appointed former Pendragon chief executive Trevor Finn as a non-executive director.

Privately-owned, Hedin is an acquisitive group, and has added several businesses in mainland Europe in recent years.

Commenting on his increased Pendragon investment back in October Hedin, who had previously criticised the bonus payment of Pendragon chief executive Bill Berman, said: “Since Hedin Group first become a shareholder in January 2019, we have supported Pendragon in its mission to regain its position as the leading automotive retail business in the UK and we are pleased with the positive steps the company has taken this year.

"Management’s strategy and the recent appointment of an independent chairman are encouraging developments from which positive momentum can be built.

"We are supportive of the management and looks forward to work constructively with the board to continue with Pendragon’s success, to the benefit all stakeholders.”

Pendragon has increased its profit expectations for 2021 by a further 14.3% at the start of December after continued car buyer demand powered it to another performance upgrade.

The group said that, in the first two months of Q4, a lower-than-expected shortfall in new car deliveries and strong margins across its vehicle sales had resulted in an increase in anticipated year-end underlying pre-tax profits from £70 million to £80m.

It was the group's fourth profit upgrade of 2021, following earlier announcements in June, July and October.