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Penske Automotive Group (PAG) stock jumped more than 8% in Thursday's premarket trading after the company announced a $16.3 billion deal to go private.
Under the agreement announced Thursday, Penske Corporation and Japan's Mitsui & Co., Ltd. will acquire the remaining shares they do not already own for $212 per share in cash.
The deal values Penske Automotive at approximately $16.3 billion, including debt. The $212-per-share offer represents an 8.84% premium to Wednesday's closing price.
It also marks a 20.09% premium to the stock's 60-day volume-weighted average price through July 21, the day before the buyers submitted their initial proposal.
Following the transaction, Penske Corporation will own approximately 64% of the company, while Mitsui will hold the remaining 36%.
Penske Automotive operates car dealerships across seven countries and ranks among North America's largest commercial truck retailers. The company employs more than 28,900 people worldwide.
A special committee of independent directors unanimously recommended the transaction after reviewing the proposal with financial and legal advisers.
The board subsequently approved the agreement.
Special Committee Chair David Hoogendoorn said the review concluded that the buyout offered greater value to minority shareholders than remaining publicly traded.
Chairman and CEO Roger Penske said the deal would strengthen the company's long-standing partnership with Mitsui, which has been a shareholder for 25 years.
He also outlined plans to expand the business through new opportunities, innovation and joint projects.
Penske Automotive expects to complete the transaction in the first quarter of 2027, subject to regulatory and shareholder approvals.
The agreement requires approval from a majority of outstanding voting shares and a majority of votes cast by unaffiliated shareholders.
The deal is not subject to financing conditions.
Meanwhile, Penske Automotive expects to continue paying quarterly dividends until the transaction closes, subject to the agreement's limits.
Once completed, the company's shares will stop trading on the New York Stock Exchange.
Penske Automotive will report third-quarter earnings before the market opens on Oct. 28.
However, the company will not hold its usual earnings conference call because of the pending buyout.
Instead, it will publish its earnings release and investor presentation on its investor relations website.
Separately, Penske Automotive announced Thursday that its board increased the quarterly cash dividend by 1.4%, or 2 cents, to $1.46 per share.
The increase brings the annualized dividend to $5.84 per share. The dividend is payable Dec. 1 to shareholders of record as of Nov. 13.
PAG Price Action: Penske Automotive Group shares were up 8.67% at $211.68 during premarket trading on Thursday, according to market data.
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