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Pendragon PLC on Monday announced that it has agreed to improved terms with Lithia Motors Inc for the sale of its UK motor business and leasing business.
Earlier this month, Pendragon and Lithia Motors agreed to the terms of a proposed sale of Pendragon NewCo 2 Ltd, Pendragon’s entire UK motor business and leasing business for a gross consideration of £250 million.
The companies also agreed to the terms of a strategic partnership, including the rollout of the company’s dealer management software, Pinewood, to Lithia’s existing 50 UK sites and the creation of a joint venture to accelerate Pinewood’s entry into the North American dealer management software market.
The partnership was underpinned by a subscription by Lithia for 279.4 million shares in Pendragon for total price of £30 million.
On Monday, Pendragon and Lithia Motors announced they have agreed to terms of an increase in the cash consideration for the disposal to £367 million.
In addition, Lithia Motors has agreed to waive conditions related to UK Competition & Markets Authority approval and original equipment manufacturer consent.
Pendragon said the revised transaction now provides shareholders with a total value per share of an expected 24.5 pence in cash, a retained 83% ownership in the continuing Pendragon business, and an indirect interest in the North American joint venture, initially valued to 0.6 pence per share.
Accordingly, shareholders are expected to receive the equivalent of 35.4 pence per share, with further upside expected from the strategic partnership.
Shares in Pendragon were up 6.6% at 35.40 pence on Monday afternoon in London.
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