8:16 am, October 9, 2023
Car dealer group Lookers fell into the hands of new Canadian owners today as its shares were delisted from the London Stock Exchange.
Last week, the Global Auto Holdings 130p per share offer – from the bidding vehicle of Canadian firm Alpha Auto Group (AAG) – was approved by the High Court.
The deal valued the business at £504.2m and was approved by shareholders on September 5. The FCA also approved the deal last month.
This morning, shares in Lookers were delisted from the London Stock Exchange.
The company confirmed in a bulletin to markets on Friday that, as the deal had now become effective, directors Paul Van der Burgh, Sue Farr and Robin Churchouse had all tendered their resignations and stepped down from the board with immediate effect.
The deal to buy Lookers came out of the blue in June when the relatively unknown Canadian firm AAG announced a 120p per share bid for the business.
Shares had been trading at 88.7p before the offer was announced. AAG was launched in 2014 and has just 22 sites in the US and Canada.
Despite the small number of dealerships, AAG turned over $1bn in 2022 and generated EBITDA profits of circa $100m.
It has bought Lookers with the backing of three banks in a highly leveraged deal.
The first offer stumbled after 20 per cent shareholder Cinch rowed back on its original promise to back the deal at 120p per share. Rumours swelled that another bidder was about to join the race – including Lithia, which has turned its attention to Pendragon instead.
However, AAG upped its bid to 130p per share and won the backing of Cinch, the used car business owned by Constellation Automotive Group, which also owns Marshalls.
Previously, Lookers had a torrid time on the stock market with a series of issues with its accounts. In 2020, just a few months after the first lockdown, its shares were suspended from the stock market after the group failed to deliver its 2019 results on time.
The dealer group was forced to book a £19m hit to its profits after internal investigations found issues with its accounts and it slashed 1,500 jobs in 2020 – some 20 per cent of its workforce – and closed dealerships in an attempt to reduce its costs.
But the firm bounced back in January 2021, with shares jumping 77 per cent to 37.25p on the first day of trading back on the stock market.
Boss Mark Raban has since steadily steered the ship to a series of impressive results. In the Covid-hit 2020 the firm made £13.7m pre-tax profit and then in 2021 this ballooned to £90.1m thanks to strong used car margins.
For 2022, the firm recorded profits of £82.7m. The group also reported a ‘robust balance sheet’ with net cash of £66.5m, plus a property portfolio worth £290.5m, equivalent to a combined 92p per share. That was back in April so these figures are likely to have improved.
