£465m Lookers takeover thrown into doubt after key shareholder withdraws support
The £465m takeover of Altrincham-based car dealerships group, Lookers, is in doubt.
The group today revealed that it is engaging with its shareholders over its recommendation to accept the bid from Toronto-based Alpha Auto Group, a privately owned Canadian car dealer network, after investor Cinch declared it will vote against the deal.
In a notice to the stock market today, Lookers said that Cinch Holdco, which owns 19.52% of Lookers, has withdrawn its letter of intent to support the takeover.
And it confirmed that Cinch intends to vote against the acquisition.
Lookers said it is re-engaging with other shareholders “to understand whether the resolutions required to effect the Scheme of Arrangement in order to implement the acquisition are capable of being passed.”
Later this morning, Lookers updated the stock market, saying it appears unlikely the takeover has sufficient support among its investors.
It said: “The Lookers directors now believe that shareholders representing in excess of 25% of the voting rights of the company intend to vote against the resolutions and, therefore, that the resolutions are not capable of being passed.”
It added: “The Court Meeting and General Meeting convened in connection with the Acquisition are scheduled to take place on 27 July 2023.
“In the event that the resolutions do not pass, as the Lookers directors now expect, the Scheme of Arrangement will lapse and Lookers will remain an independent listed company.
“In this event, the Lookers directors will continue to pursue constructive engagement with all shareholders, including Cinch, who continues to be the company’s largest shareholder holding approximately 19.52% of the issued share capital.
“As stated in the Scheme Document, the Lookers directors remain confident in the future prospects of Lookers to create sustainable value for all stakeholders.”
Cinch owner, Constellation, which also owns the We Buy Any Car brand, swooped in January 2022 to acquire 78 million Lookers shares, worth 19.9% of the group.
Lookers announced the £465m takeover approach on June 20, and the Lookers board, which will remain in situ, recommended that shareholders accept the Alpha Auto offer.
