9:11 am, August 2, 2023
The Lookers takeover saga took another twist this morning after its largest shareholder announced it was backing the revised offer for the dealership chain by Global Auto Holdings.
Global issued a statement via the London Stock Exchange today to say it had received an irrevocable undertaking by Cinch – owned by Constellation Automotive Group – to accept the increased offer by the Canadian group of 130p per share, which Lookers’ directors said they had agreed to last week.
The new bid – to be carried out via a takeover offer – replaced the earlier one of 120p per share and put a £504.2m value on the company.
Cinch, which had earlier rejected the lower offer, holds some 19.5 per cent of Lookers’ shareholding, making it the biggest investor, and its backing of the new offer is seen as vital to the takeover happening.
If if it does go ahead, Lookers will be taken off the stock market, but there is one potential major stumbling block.
According to the announcement, the irrevocable undertaking by Cinch will cease to be binding if another offer is received that equals or exceeds the revised bid by 110 per cent – equivalent to 143p per share.
The takeover offer also needs to come into effect by December 31, 2023 – unless a later date has been agreed.
Cinch withdrew its support for the 120p offer last month, but when the Lookers board’s approval of the increased offer was announced last week, meeting Cinch’s target price criterion, industry eyes became fixed on the company again.
The takeover offer only needs to be backed by 50 per cent of the shareholders, whereas the previous scheme needed 75 per cent approval.
David Kendrick, chief executive of chartered accountants UHY Hacker Young, told Car Dealer this morning: ‘It’s not unsurprising to see the increased offer accepted, as 130p was always insinuated as the target value from a Constellation perspective who had the largest individual shareholding.
‘It still looks incredible value for one of the country’s leading groups. It’s now down to the formalities of legals, OEM approval and the Financial Conduct Authority.’
Car Dealer interviewed Kendrick in June about the takeover when the news broke and you can watch it below:
