Penske Automotive agrees to be taken private for $212 per share in cash

Penske Automotive Group, Inc. (PAG) agreed Thursday to be taken private by Penske Corporation and Mitsui & Co., Ltd. in a transaction valued at an enterprise value of approximately $16.3 billion, according to a regulatory filing.

Under the merger agreement, Motown Acquisition Corp., an entity owned by Penske Corporation and Mitsui, will merge into the company, which will survive as a privately held company.

Shareholders other than the investor group will receive $212.00 per share in cash, without interest, subject to required withholding taxes.

The price is a premium of 8.84% to the company's closing price on Oct. 14, the trading day before the agreement was announced.

It is also about 8.6% above the closing price on July 21, the last trading day before Penske Corporation and Mitsui submitted an unsolicited, non-binding proposal to acquire the shares they do not already own.

"I want to thank the Special Committee for its thoughtful and diligent evaluation of the transaction," said Roger Penske, Chair and CEO of the company. "This transaction marks an important next chapter for PAG."

A special committee of independent and disinterested directors unanimously recommended the deal. The board then approved it by unanimous vote of all directors present, with directors affiliated with the investor group recusing themselves.

"We are pleased to have reached this agreement with Penske and Mitsui, our largest shareholders," said David Hoogendoorn, Penske Automotive Group Board Member and the Special Committee Chair.

The buyer expects to fund the deal with up to $2.2 billion of equity from Penske Corporation and Mitsui. It also expects up to $1.8 billion of debt under a commitment letter from JPMorgan, Bank of America and Wells Fargo.

The merger is not subject to a financing condition.

Members of the investor group and their affiliates, who own about 72.6% of the outstanding shares, signed voting and support agreements. Approval requires a majority of outstanding shares and a majority of the votes cast by disinterested stockholders.

The company must pay a $383.0 million termination fee in certain circumstances. The buyer must pay a $488.0 million reverse termination fee in others.

Either party may terminate if the merger has not been completed by Oct. 15, 2027.

The company expects to keep paying regular quarterly cash dividends through closing, in amounts not to exceed $0.02 per share above the last quarterly dividend.

The company also amended its U.S. credit agreement with Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation and Daimler Truck Financial Services USA LLC. The amendment gives the company a one-time option to raise its revolving commitment by up to $900.0 million, from $1.5 billion, if conditions are met.

The transaction is expected to close in the first quarter of 2027, subject to closing conditions, regulatory approvals and stockholder votes. After closing, the shares will no longer be listed on the New York Stock Exchange.

The company will report third-quarter 2026 results on Oct. 28, before market opening. It will not host an earnings call because of the transaction.

Moelis & Company LLC is exclusive financial advisor to the special committee.