Lookers launches £492 million bid for Reg Vardy

Lookers launches £492 million bid for Reg Vardy

	Published : Wed, 18 Jan 2006 20:10 By : Paula Demarzio Print this Story

LONDON - Car dealership Lookers PLC has made an 875-pence-a-share all cash bid for Reg Vardy PLC. This bid is better than the 800-pence-a-share bid that was tabled by Pendragon PLC. Lookers' counter-offer values Reg Vardy at £492 million.

Manchester-based Lookers' offer has now been accepted and it remains to be seen if a bidding war breaks out with a better offer by Pendragon. "The directors of Lookers expect that the acquisition will be immediately earnings enhancing, before taking into account the amortisation of goodwill," the company said in a statement.

NM Rothschild and Son is advising Lookers in this deal and the Royal Bank of Scotland is fronting about £670 million for the deal. "We have known and admired the Reg Vardy business and management for many years. The two businesses have a high degree of complementary geographic and manufacturer presence as well as a shared culture and approach," said Ken Surgenor, the chief executive of Lookers. He added that the merger of Lookers and Reg Vardy would be an "outstanding cultural and operational fit".

Pendragon’s offer was also accepted by Reg Vardy, but only 28 percent shareholders backed this bid. Reg Vardy is now looking favorably at Lookers offer and has advised shareholders' to reject Pendragon's offer and go with Lookers, "We believe the Lookers' offer represents significant value to our shareholders, that the complementary nature of the business is strong and that the enlarged group will be well-placed competitively," Vardy Chairman John Standen observed.

Reacting to these developments, Pendragon issued a statement saying, "The Company is considering its options in response to this development. Pendragon continues to believe a combination with Reg Vardy is consistent with its stated strategy of increasing its scale with a select number of manufacturing partners" Pendragon's market capitalisation is five times that of Lookers, which operates about 100 dealerships around the country.