Penske Corp and Mitsui bid $3.8 billion to take Penske Automotive private

Penske Automotive Group Inc. received an unsolicited, preliminary and non-binding proposal from Penske Corp and Mitsui & Co. to take the auto dealership chain private for $210 per share in cash, valuing the company at about $3.8 billion.

"The proposal is subject to a number of conditions, including the negotiation and execution of definitive documentation and the receipt of financing," Penske Automotive said in a statement Wednesday. The company's board said it would evaluate the proposal in consultation with its financial and legal advisors.

Penske Corp, the private holding company of former race car driver Roger Penske, owns more than 52% of Penske Automotive Group, while Mitsui holds over 20%. The Japanese trading house said the total estimated acquisition cost for the two companies would come to $3.8 billion. Shares of Penske Automotive rose more than 11% in morning trading Wednesday following the announcement.

The proposal comes as publicly traded auto dealership groups attract investor interest for their recurring service revenue streams and ongoing industry consolidation. Penske Automotive operates dealerships across the US, UK, Canada, Germany, Italy and Japan, and also retails commercial vehicles, engines and power systems primarily in Australia and New Zealand. The company was founded as United Automotive Group in 1990 and came under Penske Corp's control nine years later. Mitsui made its initial investment in 2001, and the company was renamed Penske Automotive Group in 2007.

This article is for informational purposes only and does not constitute investment advice.