The battle for control of Pendragon PLC has taken another twist after it sweetened the terms of its deal with Lithia Motors.
Lithia has agreed to pay £367 million for Pendragon’s UK motor business and leasing business, a 42% increase from the original £250 million plan.
Shareholders are expected to receive a 24.5p cash dividend, a 49% increase, as part of the deal taking the implied total initial value to around 35.4p per share.
The Nottingham-based car dealership said the transaction structure provides substantial upside for Pendragon shareholders through enhanced growth prospects for Pinewood as a standalone, pure-play SaaS business and through the strategic partnership.
The deal has the backing of 28% of Pendragon shareholders and has been backed by the board.
Since Pendragon initially unveiled its deal with Lithia it has been the subject of takeover interest.
Bid proposals worth 32p per share have been forthcoming from a AutoNation and a joint proposal from Hedin Mobility and PAG International.
Shares in Pendragon rose 4.8% to 34.89p.