Pendragon overhang after lukewarm rights issue response

17th Aug 2011 12:03

Car dealer Pendragon shifted into reverse as shareholder response to its recent rights issue was lukewarm.The company said it has received acceptances in respect of around 67.7% of the shares being offered by way of the 9 for 8 rights issue announced on 14 July.The shares were being offered at 10p in a fund raising made at the behest of the car dealer's bankers.The new ordinary shares issued represent around 52.9% of the now enlarged share capital of the company.The issue's underwriters were unable to place the shares in the market, and thus have 242.7m Pendragon shares left on their books, forming a large stock overhang which is likely to weigh on future share price performance.The share price of Pendragon was trading down a quarter of a penny at 10.25p on the day the results of the rights issue were announced.--jh