Penske Automotive owners bid $13.8 billion to take company private
Shares surge more than 10% as major shareholders move to delist the automotive retailer, citing need to navigate industry transformation.
Mitsui & Co. (U.S.A) and Penske Corporation have announced a joint bid to acquire the remaining 27.8% of Penske Automotive Group they do not already own, valuing the company at approximately $13.8 billion. The offer price is set at $210 per share, a move that would transition the automotive retailer from a publicly traded entity to a privately held company if the transaction is completed.
Following the announcement, which was made overnight from Japan, Penske Automotive shares rose more than 10%, reaching approximately $215.34 by mid-morning trading. The stock had earlier hit a 52-week high of $218.63, reflecting strong investor response to the premium offered by the two largest shareholders.
Penske Corporation currently holds about 52% of the company, while Mitsui & Co. (U.S.A) owns approximately 20.3%. Together, the pair are seeking to consolidate control over the remaining public float. The low number of existing public shareholders was highlighted in the company’s latest filing, which reported just 228 holders of record in February, indicating a relatively concentrated ownership structure even prior to this bid.
Trading activity surged significantly on the news, with volume reaching approximately 1.6 million shares by 1:15 p.m., well above the average daily volume of 303,449 shares. The company currently pays a dividend of $1.42 per share, representing a yield of approximately 2.9%, a figure that was recently increased by two cents.
In a statement regarding the proposal, Mitsui noted it has supported Penske Automotive’s growth strategy since its initial investment in 2001. The Japanese conglomerate cited the need to respond to a "transformative period" in the automotive industry driven by technological advancements, stating that the combined PC-Mitsui investors aim to sustain operational excellence while innovating the business.
Penske Automotive Group operates one of the largest global automotive retail networks, generating $27.5 billion in dealership revenue last year. Its operations are split between passenger vehicle retail and truck dealerships, with the latter including Premier Truck Group, which sells Freightliner and Western Star trucks. A spokesman for Penske Automotive declined to comment on questions submitted by FreightWaves.
The company is scheduled to report earnings and hold a conference call with analysts on the morning of July 29. The proposed deal marks a significant shift for the retailer, which has seen its stock price rise over 26% in the last 52 weeks, moving from a low of $140.12 in March to the current levels driven by the takeover speculation.
