Lookers share issue gets 80% take-up

NORTH West car dealership group Lookers today said that its open offer of new shares has closed, with 80% take-up.

The Manchester-based company is seeking to raise £80.7m – around £76.5m after expenses – through the issue of around 200 million new ordinary shares by firm placing and open offer, at 40p for each share.

The open offer has now closed with a take-up of 121 million share, or 79.9%, raising £40.4m.

Of those, around half (66 million) were bought by two major shareholders: multi-millionaire non-executive director and motor trade grandee Tony Bramall, and Trefick Limited, the Isle of Man investment company owned by veteran property tycoon Jack Petchey.

The remaining 30 million open offer shares, representing 20.1%, have been allocated to institutional shareholders and other investors, where they had been conditionally placed by broker Numis.
 
The final £20m needed to reach the £80m target will be raised by issuing around 50 million shares through a firm placing.

The company, which renegotiated its banking facilities on June 1, said then it was still looking to raise capital by alternative means, because bank lending had become so expensive.

Lookers said the fundraising would strengthen its financial position as a result of reduced borrowings and provide flexibility from which to pursue future opportunities.

Proceeds will be used to pay down debt and assist in securing more favourable terms on the company’s banking facilities. Lookers will repay a £50m high interest loan, reduce a term loan by £15m and reduce a revolving credit facility by £11.5m (which will remain available for further withdrawals).

It will also benefit from amended banking facility terms, which will reduce interest charges and fees, remove certain “onerous banking obligations” and improve flexibility.

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Meanwhile, leisure giant Holidaybreak has also announced that its £30m rights issue has been a success.

The Northwich-based group received acceptances for 21.4 million new shares at 153p, representing 98.5% of the total number offered to qualifying shareholders, and then sold the remaining 300,000 shares through stockbroker KBC Peel Hunt at a price of 249p per share. 

Holidaybreak issued 21.7 million ordinary shares at 153p per share, a 40% discount to the closing price of 299.75p before the shares were offered, because it wanted to raise around £31m to fund further acquisitions for PGL, its education business.

Holidaybreak said the downturn has seen the closure of many independent schools and commercial conference centres. It added over the last five years, the market for privately held education centres has grown at approximately 10% a year due in part to a reduction in public sector funding of local education authority centres and a general decline in smaller competitors.

PGL services approximately 5,000 UK schools out of a total of over 27,000. Its most recent centre, Windmill Hill, in Sussex is expected to produce attractive returns on the capital invested in it.

The centre was bought for £2.5m last April and the group invested a further £4.5m to create a 428-bed facility which is fully booked for the 2009 season and, as at June 15, was 80% booked for 2010.