20th Jul 2023 09:21
(Alliance News) - The agreed takeover offer for Lookers PLC by a Canadian peer was declared dead in the water on Thursday, after the UK car dealer said its largest shareholder withdrew the letter of intent it had given to bidder Global Auto Holdings Ltd.
Global Auto is the bidding vehicle of Alpha Auto Group Holdings LP, a Toronto-based operator of auto retail dealerships across North America. Last month, it had offered to pay 120 pence per share for Lookers, which is based outside of Manchester.
Lookers stock was quoted at 99.20p early Thursday in London, down 17% following the announcement.
Cinch Holdco UK Ltd withdrew its letter of intent to accept the offer for its stake of just over 19% in Lookers and now intends to vote against the acquisition, Lookers said.
On Wednesday, Global Auto's offer had 30.5% acceptances. In its own announcement early Thursday, Global Auto said this had now fallen to 11.2%.
The board of Lookers had agreed to the offer, saying in June that it represented a "compelling proposition" for shareholders.
On Thursday, the company initially said: "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."
Later Thursday morning, Lookers confirmed "the resolutions are not capable of being passed".
Court and general meetings to approve the deal still are scheduled to take place on Thursday next week. Lookers said it expects the resolutions to fail at those meetings, since shareholders representing more than 25% of its voting rights intend to vote against.
Lookers said it will remain an independent listed company, and Cinch will remain its largest shareholder at 19.5%. The directors promised to "continue to pursue constructive engagement with all shareholders".
By Tom Waite, Alliance News editor
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