Car dealer Pendragon hit by demand for board shake-up

‘A strong financial and operational performance in 2022 demonstrates the benefits of our progress’

THE car dealer Pendragon is under attack from an activist investor demanding a boardroom shake-up in the wake of a failed £400m takeover bid.

The group behind t he Evans Halshaw, Stratstone and Carstore brands, has been hit with a demand from London-based Palliser Capital to insert three directors on its board.

In a letter last week, Palliser, which owns a stake in Pendragon of about 4pc, said the board had become distracted by the failed takeover by the company’s biggest shareholder, Anders Hedin.

Palliser was formed in 2021 by James Smith, the former Hong Kong head of Wall Street activist Elliott Management.

The activist’s decision to launch a campaign against Pendragon comes just weeks after masterminding the boardroom clear out of FTSE 250 oil firm Capricorn Energy.

City sources said that Palliser had submitted a letter to the Pendragon board, led by chairman Ian Filby, in the middle of last week. Aside from board seats, the hedge fund wants Mr Filby and Pendragon’s chief executive, Bill Berman, to refocus on driving profits at the business by expanding its higher margin car-servicing operation.

Mr Hedin’s eponymous group struck a 29p-a-share take-private deal with the board i n November t hat valued Pendragon at £400m.

The swoop collapsed after the Hedin Group was unable to secure financing as soaring inflation and rising interest rates s l a mmed t he brakes on dealmaking. Pendragon shares have since sunk below 20p. Actions by the board to return Pendragon’s share price to 29p will be difficult, say City sources.

A spokesman said: “Pendragon delivered a strong financial and operational performance in 2022, demonstrating the benefits of the continued strategic progress made in recent years.”