Penske Automotive Group agreed to be taken private by Penske Corporation and Mitsui & Co. in a cash deal valuing it at approximately $16.3 billion. Unaffiliated shareholders will receive $212.00 per share, and the deal is expected to close in the first quarter of 2027.
Penske Automotive Group jumped more than 8% in premarket trading on Thursday after agreeing to be taken private by its controlling shareholder, Penske Corporation, and longtime partner Mitsui & Co. The cash deal values the international transportation company at approximately $16.3 billion.
Shareholders get a premium to Wednesday's close
Unaffiliated shareholders will receive $212.00 per share in cash, under the terms of the definitive merger agreement. That price is an 8.8% premium over Wednesday's closing price and a 26.2% premium over the 90-day volume-weighted average price before the consortium's initial proposal in July.
The deal would leave Penske Corporation with a 64% controlling stake and Japan's Mitsui with the remaining 36%. A special committee of independent directors unanimously recommended the transaction after a fairness evaluation by financial advisor Moelis & Company.
Financing and termination terms
The buyer group has secured up to $2.2 billion in equity commitments and $1.8 billion in committed debt financing backed by J.P. Morgan, Bank of America, and Wells Fargo. Penske Automotive also secured a limited consent and credit amendment that expands its revolving credit facility by up to $900 million. The transaction carries no financing contingency.
The agreement requires approval from a majority of public shareholders. It also carries a $383 million termination fee payable by Penske Automotive under certain conditions, balanced by a $488 million reverse termination fee if the buyer group fails to close.
Dividends continue until the deal closes
Shareholders will keep receiving regular quarterly dividends until completion, including a newly declared $1.46 per share payout payable on December 1 to holders of record on November 13.
Once the deal closes, Penske Automotive will terminate its New York Stock Exchange listing. Management canceled its third-quarter earnings call scheduled for October 28, though financial results and investor presentation materials will still be released as planned before the market opens.
Source: Investing.com
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