Lookers takeover back on after bidder ups offer to £504m
A Canadian auto group has increased its cash offer for Altrincham car dealership, Lookers, following dissent by one of its main shareholders.
Lookers announced the £465.4m takeover approach from Toronto-based Alpha Auto Group, a privately owned Canadian car dealer network, on June 20, which the board unanimously recommended shareholders to accept.
But the deal was thrown into doubt last Thursday when Cinch Holdco, which owns 19.52% of Lookers, withdrew its letter of intent to support the takeover.
However, Alpha Auto Group today (July 27) increased its bid to £504.2m, which the Lookers board has recommended for approval, deeming it “fair and reasonable”.
The board also announced that the court meeting and general meeting due to be held today to consider the offer have been adjourned indefinitely, and will not be rescheduled.
Lookers said, in a stock exchange statement, that the increased bid will now be implemented by way of a recommended takeover offer.
At least 75% of Lookers shareholders need to support the bid for it to succeed.
Under the new terms, Alpha Auto Group can buy shares directly from Lookers shareholders at the new price of 130p per share.
If the 75% threshold is reached, Lookers shares can be delisted. If 90% of shareholders sell, the remaining 10% will be forced to relinquish their holding.
The new offer is believed to be in line with what Cinch owner, Constellation – which also owns the We Buy Any Car brand – has in mind, so the deal is very much back in play.
Shares in Lookers soared by more than 25% on news of the increased offer.
They closed at 98p per share last night (July 26) but reached 124.59p in early trading this morning. This afternoon they were priced at 122.06p per share, valuing the group at £468.44m.
Alpha Auto Group was founded in 2014 and operates seven sites in the US, as well as 10 in its home market. It is linked to key manufacturers such as Audi, Ford, BMW, Toyota and Mercedes.
