Lookers has refused to rule out a possible takeover battle for UK car dealership group Reg Vardy despite Monday’s confirmation of a recommended GBP450m offer for the business from Pendragon.
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A source told just-auto it was conceivable for Lookers to still put a bid on the table and that the company has calculated finances to be well within its means.
It was reported on Monday that Pendragon will pay GBP8.00 in cash for each Reg Vardy share – valuing it at approximately GBP450m – while rival dealer group and possible bidder Lookers said it was still considering its options.
Pendragon’s initial offer was GBP7.50 but this was raised after Vardy said it had received two additional approaches above that.
One of these approaches was from Manchester-based new and used car retailer Lookers but the other remains unidentified.
Pendragon was effectively given 27.2% of the target’s shares by Sir Peter Vardy and other directors. It has a call option and the right to acquire 16.6% of these shares, owned by Vardy, at their GBP8.00 offer price.
However, just-auto’s source said that while this 16.6% of shares are considered ‘hard’ for Lookers to acquire, the remaining 10.6% of shares are ‘soft’ and could be altered.
Industry analyst Rob Golding informed just-auto that while Reg Vardy’s management is confident the shareholders will accept the Pendragon bid come January, if Lookers offers a higher amount, it becomes irrelevant.
He said: “In recommending Pendragon’s bid Reg Vardy has started the ball rolling towards takeover by showing it is willing to sell out.”
A spokesperson for Lookers told just-auto: “We know the Reg Vardy business well and believe a combination would be excellent for shareholders, manufacturers and customers.”
On Monday Lookers confirmed it had been actively engaged in discussions with the Board of Reg Vardy about a possible cash offer, making good progress and arranging finance.
It said that taking account of the announcement by Pendragon, it was discussing options with potential funding providers. It believes that there would be no regulatory issues in relation to any offer it might make.
