UK’s Pendragon rejects $486 million buyout proposal from top shareholder

(Reuters) – Britain’s Pendragon said on Wednesday it had rejected an unsolicited buyout proposal from its largest shareholder Hedin Mobility Group and U.S.-based PAG International, which valued the car dealer at about 392 million pounds ($486 million).

The offer for 28 pence per share from Hedin, which holds a 27.6% stake in Pendragon, and PAG comes a year after Hedin made a cash offer of 29 pence per share for the company.

Hedin had, however, dropped its pursuit to takeover the British auto retailer, citing challenging market conditions and uncertain economic outlook.

Shares of London-listed Pendragon jumped 12.6% to 26.55 pence by 1424 GMT.

On Monday, the company said it would sell its UK motor and leasing businesses to Lithia for 250 million pounds ($310 million) and enter a strategic partnership for expansion of its dealer management software business to North America.

The company said Wednesday’s offer from Hedin and PAG undervalued the firm.

($1 = 0.8066 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Shailesh Kuber)