Pendragon to sell UK motor, leasing businesses to Lithia for $310 million

(Reuters) -Britain's Pendragon said on Monday it would sell its UK motor and leasing businesses to Lithia for 250 million pounds ($310 million) and enter a strategic partnership for expansion of its dealer management software business to North America.

The companies also agreed on the terms of a partnership including the rollout of Pinewood, the British firm's dealer management software (DMS) business, to Lithia Motors' existing 50 UK sites and the creation of a joint venture to speed up Pinewood's entry into the North American DMS market.

"The transaction is the value-maximising conclusion of the strategic review announced by Pendragon last year and the board believes that it will deliver an attractive cash dividend to shareholders of c.£240 million," the Nottingham-based Pendragon said in a statement.

The joint venture is underpinned by a subscription

by Lithia, one of the largest automotive retailers in North

America, of 279.4 million new ordinary shares in Pendragon for 30 million pounds.

As part of the sale and subscription, Pendragon would retain existing listing on the London Stock Exchange and change its name to Pinewood Technologies Plc.

($1 = 0.8065 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu and Toby Chopra)