UK car dealership Pendragon has received a £400m takeover offer from its major shareholder, sending its shares soaring by more than a fifth on Monday morning.

The bid would see Swedish motor company Hedin Group buy out the entirety of Pendragon’s share capital at 29 pence per share.

The group, owned by Anders Hedin, has a 27.5% stake in the car dealership and is its biggest shareholder.

Hedin Group is a major retailer of vehicles in several European countries including Sweden, Germany, and the Netherlands and it operates 240 dealerships.

Pendragon said it is considering the preliminary proposal and Hedin would need to announce a firm offer by October 24 at the latest.

The announcement comes after Pendragon was forced to reject a bid from an international company after being unable to get hold of one of its biggest shareholders, it said in August.

The bid would have valued Pendragon at about £403m, the same amount that Hedin has proposed, but the group could only get the support of four out of its five major shareholders and had to walk away from the offer.

Car dealership Pendragon receives a £400m takeover offer from its major shareholder