The London-listed firm received an unsolicited, preliminary and conditional proposal from Hedin Group on 26 September, regarding a possible cash offer for the entire issued and to-be-issued share capital of Pendragon , at 29p per share.
It said discussions between the parties were ongoing, adding that it had granted Hedin access to complete its necessary due diligence.
Pendragon said it had requested, and the Takeover Panel consented to, an extension to the date by which Hedin would be required either to announce a firm intention to make an offer for Pendragon, or to announce that it did not intend to make an offer.
Such an announcement would now need to be made by 1700 GMT on 21 November.
“This deadline can be extended by the board of Pendragon, with the consent of the Takeover Panel,” the board said in its statement.
“There can be no certainty that a firm offer will be made.
“A further announcement will be made in due course.”
At 1101 BST, shares in Pendragon were up 1.14% at 26.7p.
Reporting by Josh White at Sharecast.com.