Lookers is lining up a GBP466m offer for Reg Vardy and wants backing from investor Jack Petchey to table the bid, according to the Daily Telegraph. 

The Reg Vardy board has already accepted a recommended GBP450m offer from Pendragon - potentially costing GBP8.00 a share.

But the Telegraph said Lookers wants to use backing from the banks, including HBOS, to put forward an increased offer. The car dealer group's GBP466m bid for Reg Vardy is priced at around GBP8.30 per share.

Reports suggest any deal will need the approval of Jack Petchey, who is the second highest shareholder in Reg Vardy.

Petchey, whose Trefick investment vehicle controls at least 6% of the shares, has reportedly been in talks with Lookers and will support the highest price offered.

A source told the paper that a hostile bid was unlikely but it could not be ruled out altogether. Sir Peter Vardy said: "They don't need to go hostile. If they want to bid, they can bid. There are plus points to both bids. If Lookers bids, it will have the scale with us to compete with Pendragon."