‘Irrefusable’ £464 million bid for Lookers backed by its board
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transatlantic bid for London-listed automobile dealership lookers breathed new life into London’s lacklustre dealmaking scene at this time.
The £464 million swoop for the 150-forecourt stock market stalwart got here from Canada’s Alpha Auto Group and was backed by Lookers board, which known as it “fair and reasonable”.
Priced at 120p per share, it provided investors a hefty 35% premium in contrast with Monday’s closing worth. Lookers inventory headed towards the provide worth, up 30p to 119p.
The deal will finish a protracted spell for the Mancunian agency on the London market. It first listed in 1973 and was based in 1908 promoting bicycle elements earlier than it moved into used automobiles. It now lists 7,000 automobiles from 34 producers.
Lookers has been seen as a possible takeover goal for a while. It was the topic of an inquiry by the Financial Reporting Council in 2019, when its shares had been suspended earlier than it will definitely reported a £45 million loss for the yr, simply earlier than the pandemic hit automobile gross sales.
It was then approached by rival dealership Pendragon, however resisted the bid, and there was hypothesis of additional gives for the Manchester-based firm ever since, as a part of anticipated dealmaking within the business.
According to City consultants, dealerships seem like good worth after their valuations took a success throughout Covid and have taken time to rebound even because the used automobile market recovers strongly.
Victoria Scholar, head of funding, Interactive Investor stated AAG’s provide was “irrefusable”, including: “Lookers is in a strong position financially, having raised its 2023 profit forecast in April, partly thanks to higher average selling prices for new vehicles.”
The transfer will stoke hopes for a wider return to dealmaking, after a desolate begin to the yr for mergers and acquisitions, one of many major engines for banks’ income within the Square Mile.
In 2023, M&A bought off to its slowest begin for a decade, with the worth of offers down 60% year-on-year to £38 billion in accordance with knowledge from market tracker Refinitive. There had been solely simply over 1,200 offers involving UK firms in the course of the quarter, the bottom since 2017.
Lookers was suggested by Numis and Peel Hunt.