8:33 am, July 20, 2023
Alpha Auto Group’s acquisition of Lookers could be in doubt after Cinch-owner Constellation has withdrawn its support.
An update issued to the London Stock Exchange this morning said Constellation, through its Cinch Holdco UK business, had withdrawn its letter of intent.
Lookers said Cinch now intended to vote against its acquisition.
‘Lookers is re-engaging with other shareholders to understand whether the resolutions required to effect the Scheme of Arrangement in order to implement the Acquisition are capable of being passed,’ the update said.
In a further update, Lookers said: ‘The Lookers directors now believe that shareholders representing in excess of 25 per cent of the voting rights of the company intend to vote against the resolutions and therefore that the resolutions are not capable of being passed.
‘The court meeting and general meeting convened in connection with the acquisition are scheduled to take place on July 27, 2023. In the event that the resolutions do not pass, as the Lookers directors now expect, the Scheme of Arrangement will lapse and Lookers will remain an independent listed company.
‘In this event, the Lookers directors will continue to pursue constructive engagement with all shareholders, including Cinch, who continues to be the company’s largest shareholder holding approximately 19.52 per cent of the issued share capital.’
Constellation, which owns BCA, Cinch, We Buy Any Car and rival operation Marshall Motor Group, owns a 19.2 per cent share in Lookers.
The announcement is a major block in Alpha Auto Group’s plans to take over Lookers.
The Canadian dealer group, through a bidding vehicle called Global Auto Holdings Limited, had originally made an offer of 120p a share on June 20, worth £465.4m.
At the time of the move, Global Auto Holdings reported it had support amounting to 42 per cent of Lookers.
It’s thought that figure, however, has been dropping over recent weeks.
The door was left open for a rival counter bid for Lookers, with investment firm Schroder – which holds 4.1 per cent of Lookers’ stock – saying a bid of around 132p per care could snatch the deal.
Constellation has so far not revealed why it intends to vote against Global Motor Holdings’ bid to acquire Lookers.
