Penske Automotive Is Going Private. The Stock Is Rising.

Penske Automotive shareholders are set to receive $212 a share in cash under a take-private deal. (Photograph by Daniel Acker/Bloomberg)

It’s the end of road for Penske Automotive investors.

The car retailer said Thursday it would end its public stock listing after entering a merger agreement with Penske Corp. and Japanese trading firm Mitsui & Co., which already own over 70% of Penske Automotive. The transaction is expected to close in the first quarter of 2027.

Under the deal, Penske Automotive shareholders will receive $212 a share in cash, valuing the transportation company at roughly $16.3 billion. The final share price also reflects a 8.8% premium of Penske Automotive stock’s closing price of $194.79 Wednesday, the day before the deal was publicly announced.

Shares of Penske Automotive gained 8.5% to $211.40 in premarket trading Thursday. The stock was heading for its largest single-day percentage gain since July 22, when it rose 9.9%, according to Dow Jones Market Data. As of the close of trading Wednesday, the stock has advanced nearly 23% this year, beating the S&P 500 ’s gain of roughly 13%.

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Penske Automotive stock has had a pretty good year, driven by solid earnings beats and steady growth. Strong demand in the parts and service divisions have also helped offset broader pressure on new vehicle margins across the automotive retail sector.

The transportation company reported that revenue for its fiscal second quarter ended June 30 grew about 11% to $8.5 billion from a year ago, with earnings of $3.62 a share beating Wall Street’s calls for $3.42 a share, according to FactSet.

Penske Automotive sells both new and used vehicles, operates commercial truck dealerships, and provides truck leasing and rental services.

Shares of CarMax and Lithia Motors rose 3.4% and 0.6% in premarket trading Thursday, respectively. Meanwhile, Carvana fell 0.8%.

Write to Mariapaula Gonzalez at mariapaula.gonzalez@barrons.com

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