The buyout bid for Penske Automotive (PAG) is a testament to the quality of the company's business, Morgan Stanley said in a note Friday.

Penske Automotive said late Wednesday it has received a non-binding offer from Penske Corp. and Mitsui & Co. to buy the remaining shares they do not already own for $210 a share in cash. Penske Corp., Mitsui, and their affiliates together beneficially own 72.6% of Penske Automotive's outstanding common stock, it said.

Morgan Stanley said that Penske Automotive's shares are trading above the bid, at around $215, which may mean the market is "embedding a non-zero probability of a higher bid."

The investment firm noted that Penske Automotive is a "high quality family owned asset" and a "well managed organization with a diversified portfolio and prudent capital allocation."

The company's drivers of value include its stable core franchise dealer business and a "quality brand portfolio with a >70% luxury skew," the note said.

Morgan Stanley said it moved Penske Automotive's price target to the bid price, which is $210 per share. The firm lowered the company's rating to equalweight from overweight, saying the shares will likely trade in line with the offer price for the "foreseeable future."

Price: 215.90, Change: +0.36, Percent Change: +0.17