PDG.L Regulatory News (PDG)

Pendragon PLC

("Pendragon" or the "Company")

US Motor Group - Disposal of Puente Hills Chevrolet, California

Pendragon announces that it agreed on 15 August 2019 to dispose of the trade and assets of its Chevrolet motor vehicle dealership located in Puente Hills, California (the "Transaction"). The dealership subject to the Transaction forms part of the Company's overall US Motor Group.

In relation to the Transaction, the purchaser of the business is Scott Biehl ("Scott Biehl"), the operator of a privately owned dealership group. The consideration for the Transaction is expected to be approximately £17.2 million, to be satisfied entirely in cash payable at completion, with the precise amount being determined following the preparation of completion accounts in respect of the Transaction. As at 31 December 2018, the gross assets that are the subject of the Transaction amounted to £42.0 million and the loss prior to central costs amounted to GBP £0.6 million. The proceeds of the Transaction will be initially used to reduce net debt. Completion of the Transaction is subject to a number of conditions, including, inter alia, the purchaser securing funding approval.

Upon the agreement that has been entered into in respect of the Transaction becoming unconditional, General Motors ("GM"), as the OEM, will have a right of first refusal over the trade and assets that are the subject of the Transaction. In the event that such right is exercised in respect of the Transaction, GM will nominate a replacement to the current purchaser, who will otherwise acquire the relevant trade and assets on the same terms. The Transaction is in line with the Company's stated strategy of disposing of its US Motor Group and follows the disposal of two dealerships in California for a consideration of approximately GBP £60 million, which was announced in May 2019. 

The Company will make a further announcement upon completion of the Transaction or earlier in the event that the Transaction will not proceed to completion. The Company continues to progress the disposal of the remainder of its US Motor Group.