Lookers Reject Consortium Bid

Lookers has revealed that it rejected Jack Petchey’s acquisition bid after his consortium lowered its 80p per share offer to 70p.

It was also reported in the Sunday Times that Petchey, who owns a 17.3 per cent stake in the top 10 dealer group, now wants the board to hive off its property portfolio into a separate listed company.

Lookers described the revised bid as “materially below” the original offer and said the Petchely led consortium — consisting of his Trefick fund, Moor Park Capital Partners LLP and Brett Palos Capital No 2 — had lowered its offer based on new information it received from the dealer group relating to the valuation of the company’s freehold and long leasehold properties and the group’s pension schemes.

“With regard to property, it appears that the consortium’s value of 80 pence per share had been based on its assumption that the value of the company’s property portfolio was significantly in excess of the value included in the accounts of the company,” said a Lookers statement.

“The due diligence exercise indicated that the value of the properties in total was above the value in the company’s accounts, but not to the extent required by the consortium’s business plan.”

“The consortium’s advisers had also carried out a preliminary review of the company’s pension schemes as part of the due diligence exercise. Their initial view suggested that the additional annual payments towards the pension deficit may have to be increased as a consequence of the change in ownership and this had a negative impact on the consortium’s valuation of the company.”

The consortium cannot now make an offer for Lookers for six months unless they have the agreement or recommendation of the Lookers board, somebody else makes an offer for the company or there is an announcement of a reverse takeover.