One of Pinewood Technologies’ largest shareholders has voiced opposition to the company’s proposed £545 million sale to American private equity firm Ridgeview Partners, citing concerns over an unusual clause in the takeover offer. Harwood Capital, which holds a 5.7 percent stake in Pinewood, has criticized Ridgeview’s preferred liquidation rights as unprecedented and potentially disadvantageous to existing shareholders.
The deal, announced on Friday evening, offers Pinewood shareholders the choice to either sell their shares for cash at 448 pence each or roll over their holdings into the new company. Pinewood, formerly known as Pendragon before divesting its motor dealership chain in 2024, now focuses on distributing proprietary dealership management software to car retailers.
According to the offer terms, Ridgeview would receive preferential treatment in any future sale or liquidation, being compensated ahead of any shareholders who opt to maintain their stake after the takeover. Christopher Mills, founder of Harwood Capital, expressed strong reservations about this arrangement, warning it could establish an adverse precedent in the London stock market. “Let’s say it all goes wrong and Pinewood is later sold for £300 million, our clients would be junior to [Ridgeview] and could lose all their money, while Ridgeview wouldn’t lose a penny,” Mills said. While acknowledging that the risk of such an outcome is low, he emphasized that creating preferential liquidation rights could encourage similar terms in future acquisitions, to the detriment of British investors.
Harwood Capital has announced plans to vote against the sale unless Ridgeview amends the proposal to make the terms more equitable. Mills noted that his firm would support the offer and roll over its shares if the company revised the terms to ensure fairness. Otherwise, Harwood favors Pinewood remaining independent.
The Pinewood board has indicated it would be “minded to recommend” Ridgeview’s bid at 448p per share if a formal offer is submitted. Several major shareholders, representing nearly half of the outstanding shares, have signaled their support for the deal. Among them is Lithia, the largest car dealership group in the United States, which acquired the Pendragon business two years ago and holds approximately 32 percent of Pinewood’s shares.
A Pinewood spokesperson acknowledged Harwood’s right to form its own view on the transaction but expressed confidence in the proposed deal. The board described Ridgeview’s offer as “compelling,” highlighting the strategic alignment and financial strength the partner would bring. Additionally, the spokesperson noted that the cash option provides shareholders with a substantial premium over the current share price, while the rollover option allows investors with an appetite for risk to remain involved in the business.
Ridgeview declined to comment on the matter.