UK: Lookers makes GBP492m bid for Reg Vardy
UK dealer group Lookers has outbid rival Pendragon in the battle to acquire Reg Vardy with a GBP492m (US$866m) takeover offer.
Reg Vardy's board has recommended shareholdes accept the Lookers acquisition in a cash deal worth GBP8.75 per share.
In December 2005, Pendragon offered GBP8.00 in cash for each Reg Vardy share, valuing the company at approximately GBP450m.
The Lookers offer is a 9% increase over the Pendragon offer and a 32% increase on the closing price of Reg Vardy shares on 15 November 2005, before talks with Pendragon began.
Lookers CEO Ken Surgenor said: "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.
"The merger of our respective businesses therefore represents an outstanding cultural and operational fit and brings many opportunities for enhanced future growth. This is excellent news for both companies' shareholders and employees as well as for our manufacturer partners."
The Lookers offer is now subject to approval by Reg Vardy shareholders, with a decision likely to be made by March 2006.
Irrevocable undertakings and statements of intent to vote in favour of the offer have been received from 28.5% of Reg Vardy shareholders, including Trefick, Jack Petchey's investment vehicle, as well as UBS, Aberforth Partners and F&C Asset Management.
Lookers said in a statement: "The offer from Lookers represents an attractive cash price for Reg Vardy shareholders following the offer from Pendragon of GBP800 per Reg Vardy Share."
Lookers, which has more than 100 multi-franchise dealerships in the UK, also said the acquisition of North-East based Reg Vardy would create greater critical mass and a wider geographic spread of activities
Reg Vardy chairman John Standen said: "We believe that Lookers' offer represents significant value to our shareholders, that the complementary nature of the businesses is strong and that the enlarged group will be well placed competitively.
"Accordingly, the board has decided to recommend this higher offer and strongly advises its shareholders not to accept the offer from Pendragon."