Lookers pulls out of race for Vardy
UK car dealership Lookers today conceded defeat to bigger rival Pendragon in the £506m (€740m) battle for the Sunderland-based operator Reg Vardy.
Lookers said it was in the best interests of its shareholders not to proceed with an offer for Vardy, which earlier today announced it had swung behind Pendragon following an increased takeover proposal on Friday.
The higher price offered by Pendragon trumped an agreed deal worth £492m (€720m) from Manchester-based Lookers, which surprised the market with its willingness to take on Vardy even though it is more than twice its size.
Despite the setback today, Lookers told shareholders it was intent on building its scale in 2006.
It said: “Lookers remains committed to its proven strategy of strengthening its new car franchises, used cars and aftersales presence through organic growth and by acquisitions.”
Pendragon fired the gun on the takeover race in November when it lined up Vardy as a target after the benefits of its £230m (€336m) deal for CD Bramall in 2004 shielded it from a slowdown in the car industry.
Pendragon has around 230 sites covering specialist and luxury franchises such as BMW, Ferrari and Land Rover, while Vardy owns 102 sites and Lookers has around 90.
Vardy chairman John Standen said the combination of his business with Pendragon created a “formidable force in the motor retail sector”.
He added today: “I am pleased that such a satisfactory result is being achieved for shareholders.”
Pendragon indicated last week it may also be interested in bidding for Lookers as part of an attempt to create a business worth £1.36bn (€2bn) with turnover of around £6bn (€8.8bn) a year. The three firms would have 6% of the new car market.
Shares in Reg Vardy jumped 4% to 894p while Pendragon rose 31p to 544p as investors celebrated its likely success in the long-running saga. Lookers slipped back 6% to 568p.
