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US-based car retailer Lithia Motors linked with Pendragon takeover bid

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US-based Lithia Motors is said to have been identified as the “large international corporate” which launched a £460 million takeover bid for Pendragon.

A report published by Sky News said that sources close to the $22.8bn (£19bn) revenue New York Stock Exchange-listed car retail group had confirmed that it had been behind the failed bid reported by Pendragon last week.

In a statement issued via the London Stock Exchange, Pendragon revealed that a 29p per share offer had been withdrawn after one of its five major shareholders refused to engage in takeover talks which had “merited engagement”.

The bidder then withdrew its offer due to a lack of certainty about a positive conclusion, Pendragon’s statement revealed.

The failed takeover talks came five months after shareholder Anders Hedin, boss of Swedish car retailer Hedin Group, tabled a bid which was rejected by the PLC's board.

In May the vocal Pendragon shareholder then acquired shares to increase his stake to just over 27% of voting rights – securing his position as the business's major shareholder.

Two years ago merger talks between Pendragon and Lookers stalled, ending a process which would have created the UK’s largest car retail group.

Last month Pendragon chief executive Bill Berman said that an anticipated £33m underlying first-half pre-tax profit will give the car retail PLC “good momentum” for H2 2022.

The group expects its profitability to decline by around 5.9% despite its strong start to the year, however.

Its recent trading update stated that its performance had been offset by an increase in underlying operating costs of approximately £20m, including an £8.3m impact from the removal of government support, a £7m increase in marketing costs as it relaunched its CarStore used car retail division and wider inflationary cost pressures.

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