9th Mar 2006 07:02
Pendragon PLC09 March 2006 Not for release, publication or distribution, in whole or part, in, into or from the United States, Canada, Australia or Japan. For immediate release 9 March 2006 FINAL OFFER by CITIGROUP GLOBAL MARKETS LIMITED on behalf of PENDRAGON PLC ("PENDRAGON") for LOOKERS PLC ("LOOKERS") Summary • The Board of Pendragon announces the terms of an offer for the whole of the issued and to be issued share capital of Lookers (the "Offer"). • The Offer of 1.15 New Pendragon Shares for each Lookers Share values each Lookers Share at approximately 725 pence and values the entire issued share capital of Lookers at approximately £258.8 million, based on the Closing Price of 630 pence per Pendragon Share on 8 March 2006, being the last business day prior to this announcement. • The Offer represents a premium of: • 95 per cent. to the average Closing Price of 370.7 pence per Lookers Share for the twelve months prior to 26 January 2006, being the last business day prior to the announcement by Pendragon of the terms of a possible offer for Lookers, based on the Closing Price of 630 pence per Pendragon Share on 8 March 2006; and • 42 per cent. to the Closing Price of 509 pence per Lookers Share on 26 January 2006, being the last business day prior to the announcement by Pendragon of the terms of a possible offer for Lookers, based on the Closing Price of 630 pence per Pendragon Share on 8 March 2006. • The Offer is final and will not be increased. The Closing Date will be 21 days after the posting of the Offer Document and that will be the final date upon which the Offer can become or be declared unconditional as to acceptances, except with the Panel's consent. The Offer will not (without the Panel's consent) be kept open after the Closing Date unless it has become unconditional as to acceptances. • The Offer is conditional, inter alia, upon Pendragon receiving valid acceptances in respect of the Offer which, together with Lookers Shares acquired or agreed to be acquired before or during the Offer Period, will result in Pendragon (and any persons acting in concert with it) holding Lookers Shares carrying more than 50.0 per cent. of the voting rights then normally exercisable at general meetings of Lookers. • Pendragon has received irrevocable undertakings from certain Lookers Shareholders to accept the Offer in respect of 4,486,459 Lookers Shares, representing approximately 12.6 per cent. of the existing issued share capital of Lookers. These irrevocable undertakings will only cease to be binding in the event that the Offer lapses or is withdrawn or a third party announces a firm intention to make an offer for Lookers on terms representing, in the opinion of the party giving the irrevocable undertaking, an improvement of 5 per cent. on the value of the Offer. • The Offer is a Class 1 transaction for Pendragon under the Listing Rules and is therefore conditional, inter alia, on the approval by Pendragon Shareholders of the Offer at an extraordinary general meeting. The Directors of Pendragon intend to unanimously recommend Pendragon Shareholders to vote in favour of the necessary resolutions. Commenting on the Offer, Sir Nigel Rudd, Chairman of Pendragon, said: "We believe that there are significant benefits available to shareholders fromour continuing consolidation in the UK motor vehicle retail sector and thisoffer for Lookers is consistent with Pendragon's strategy to deliver thesebenefits. Whilst we would have preferred to make this offer on a recommendedbasis, we have so far been unable to engage the Board of Lookers in meaningfuldiscussions. Therefore, we are making these proposals directly to Lookers'shareholders and are confident that they will be supportive of what we believeto be a very compelling offer." This summary should be read in conjunction with the full text of the attachedannouncement. * * * * * There will be a meeting for analysts at 9.30 a.m. today at the offices ofFinsbury Group, Tenter House, 45 Moorfields, London EC2Y 9AE. ENQUIRIES Pendragon PLCTrevor Finn, Chief ExecutiveDavid Forsyth, Finance DirectorTelephone: 01623 725 114 Citigroup Global Markets Limited(Financial adviser and corporate broker to Pendragon)Philip Robert-TissotSam SmallChris Zeal (Corporate Broking)Telephone: 020 7986 4000 Finsbury Group(Public relations adviser to Pendragon)Rupert YoungerGordon SimpsonTelephone: 020 7251 3801 Citigroup Global Markets Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forPendragon and for no one else in connection with the Offer and will not beresponsible to any other person for providing the protections afforded toclients of Citigroup Global Markets Limited or for providing advice in relationto the Offer. This announcement does not constitute, or form part of, any offer for or anysolicitation of an offer for, securities in any jurisdiction. Any acceptance orother response to the Offer should be made only on the basis of informationcontained in or referred to in the Offer Document and the InformationMemorandum. The Offer is not being and will not be made, directly or indirectly, in or into,or by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile transmission, electronic mail, telex or telephone)of interstate or foreign commerce of, or any facilities of a national securitiesexchange of, the United States, Canada, Australia or Japan and the Offer willnot be capable of acceptance by any such use, means, instrumentality orfacility, directly or indirectly from or within the United States, Canada,Australia or Japan. Accordingly, neither this Announcement nor the InformationMemorandum nor the Offer Document nor the Form of Acceptance is being, and mustnot be, mailed or otherwise forwarded, transmitted, distributed or sent in, intoor from the United States of America, Canada, Australia or Japan. Doing so mayrender invalid any purported acceptance of the Offer. All Lookers Shareholdersor other persons, (including nominees, trustees or custodians) who would orotherwise intend to, or may have a contractual or legal obligation to, forwardthis Announcement and/or the Information Memorandum and/or the Offer Documentand/or the Form of Acceptance to any jurisdiction outside the United Kingdom,should refrain from doing so and seek appropriate professional advice beforetaking any action. The Offer is not an offer of securities for sale in the United States of Americaor in any jurisdiction in which such an offer is unlawful. The New PendragonShares to be issued in connection with the Offer have not been, nor will theybe, registered under the US Securities Act of 1933, as amended, or under thesecurities laws of any state of the United States of America and may not beoffered or sold in the United States of America, absent registration or anapplicable exemption from registration. No public offering of the securitieswill be made in the United States of America. The relevant clearances have notbeen, and will not be, obtained from the securities commission of any provinceor territory of Canada; no prospectus or a prospectus equivalent has been, orwill be, lodged with, or registered by, the Australian Securities andInvestments Commission or the Japanese Ministry of Finance and the NewPendragon Shares have not been, and nor will they be, registered under oroffered in compliance with applicable securities laws of any state, province,territory or jurisdiction in Canada, Australia or Japan. Accordingly, PendragonShares may not (unless an exemption under relevant securities laws isapplicable) be offered, sold, resold or delivered, directly or indirectly, in orinto Canada, Australia or Japan or any other jurisdiction outside the UnitedKingdom if to do so would constitute a violation of the relevant laws of, orrequire registration thereof in, such jurisdiction or to, or for the account orbenefit of, a person located in Canada, Australia or Japan. This Announcement contains a number of forward-looking statements relating toPendragon and Lookers with respect to, among others, the following: financialconditions; results of operation; the businesses of Pendragon and Lookers;future benefits of the transaction; and management plans and objectives.Pendragon considers any statements that are not historical facts as "forward-looking statements". They involve a number of risks and uncertaintiesthat could cause actual results to differ materially from those suggested by theforward-looking statements. Important factors that could cause actual resultsto differ materially from estimates or forecasts contained in theforward-looking statements include, among others, the following possibilities:future revenues are lower than expected; costs or difficulties relating to thecombination of the businesses of Pendragon and Lookers, or of other futureacquisitions, are greater than expected; expected cost savings from thetransaction or from other future acquisitions are not fully realised or notrealised within the expected time frame; competitive pressures in the industryincrease; general economic conditions or conditions affecting the relevantindustries, whether internationally or in the places Pendragon and Lookers dobusiness are less favourable than expected, and/or conditions in the securitiesmarket are less favourable than expected. Except as required by the FSA, theLondon Stock Exchange or applicable law, Pendragon expressly disclaims anyobligation or undertaking to release publicly any updates or revisions to anyforward-looking statements contained in this announcement to reflect any changein Pendragon's expectations with regard thereto or any change in events,conditions or circumstances on which any statement is based. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Pendragon or of Lookers, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Pendragon or of Lookers, they will be deemed to be a singleperson for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Pendragon or of Lookers by Pendragon or Lookers, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue,can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Not for release, publication or distribution, in whole or part, in, into or from the United States, Canada, Australia or Japan. For immediate release 9 March 2006 FINAL OFFER by CITIGROUP GLOBAL MARKETS LIMITED on behalf of PENDRAGON PLC for LOOKERS PLC 1. Introduction The Board of Pendragon announces the terms of an offer for the whole of theissued and to be issued share capital of Lookers by Citigroup Global MarketsLimited on behalf of Pendragon. The Offer is a Class 1 transaction for Pendragon under the Listing Rules and istherefore conditional, inter alia, on the approval by Pendragon Shareholders ofthe Offer at an extraordinary general meeting. 2. The Offer On behalf of Pendragon, Citigroup will offer to acquire, on the terms andsubject to the conditions to be set out in the Offer Document and in theaccompanying Form of Acceptance, the entire issued and to be issued sharecapital of Lookers on the following basis: for each Lookers Share 1.15 New Pendragon Shares The Offer of 1.15 New Pendragon Shares for each Lookers Share values eachLookers Share at approximately 725 pence and values the entire issued sharecapital of Lookers at approximately £258.8 million, based on the Closing Priceof 630 pence per Pendragon Share on 8 March 2006, being the last business dayprior to this announcement. The Offer represents a premium of: • 95 per cent. to the average Closing Price of 370.7 pence per Lookers Share for the twelve months prior to 26 January 2006, being the last business day prior to the announcement by Pendragon of the terms of a possible offer for Lookers, based on the Closing Price of 630 pence per Pendragon Share on 8 March 2006; and • 42 per cent. to the Closing Price of 509 pence per Lookers Share on 26 January 2006, being the last business day prior to the announcement by Pendragon of the terms of a possible offer for Lookers, based on the Closing Price of 630 pence per Pendragon Share on 8 March 2006. The Offer is final and will not be increased. The Closing Date will be 21 daysafter the posting of the Offer Document and that will be the final date uponwhich the Offer can become or be declared unconditional as to acceptances,except with the Panel's consent. The Offer will not (without the Panel'sconsent) be kept open after the Closing Date unless it has become unconditionalas to acceptances. The Offer is conditional, inter alia, upon Pendragon receiving valid acceptancesin respect of the Offer which, together with Lookers Shares acquired or agreedto be acquired before or during the Offer Period, will result in Pendragon (andany persons acting in concert with it) holding Lookers Shares carrying more than50.0 per cent. of the voting rights then normally exercisable at generalmeetings of Lookers. The Lookers Shares will be acquired by Pendragon fully paid up and free from allliens, equitable interests, charges, encumbrances, rights of pre-emption andother third party rights or interests and together with all rights now orhereafter attaching thereto, including the right to receive and retain alldividends and other distributions (if any) declared, made or paid, or any otherreturn of capital (whether by way of reduction of share capital or share premiumaccount or otherwise) made, on or after the date hereof, save for the PermittedLookers Final Dividend. If any dividend, other distribution or return of capital (other than thePermitted Lookers Final Dividend) is declared, made or paid on or after the datehereof which Pendragon does not directly receive the benefit of, Pendragonreserves the right to reduce the Exchange Ratio to reflect the value of suchdividend, other distribution or return of capital (other than the PermittedLookers Final Dividend). The precise mechanics will be set out in the OfferDocument. Any reduction to the Exchange Ratio will be only be made with theconsent of, and on a basis to be agreed with, the Panel. The Offer will extend to any Lookers Shares that are unconditionally allotted orissued fully paid (or credited as fully paid) prior to the date on which theOffer closes (or such earlier date as Pendragon may, subject to the City Codeand/or with the consent of the Panel, determine, being not earlier than the dateon which the Offer becomes or is declared unconditional as to acceptances or, iflater, the Closing Date) pursuant to the exercise of the options under theLookers Share Option Schemes or otherwise. The Offer Document is expected to beposted to Lookers Shareholders not later than 28 days after the date of thisannouncement but it is anticipated that posting will not be before 30 March2006. Full acceptance of the Offer, assuming exercise of all existing options underthe Lookers Share Option Schemes, would result in the issue of up toapproximately 41,246,749 New Pendragon Shares, representing approximately 23.9per cent. of the issued ordinary share capital of Pendragon as enlarged by theacquisition of Lookers. Fractional entitlements to New Pendragon Shares under the terms of the Offerwill be disregarded and will not be issued. When made, the Offer will be subject to the condition that the admission of theNew Pendragon Shares (i) to listing on the Official List of the UK ListingAuthority becomes effective in accordance with the Listing Rules of the UKListing Authority and (ii) to trading on the London Stock Exchange's market forlisted securities becomes effective in accordance with the Admission andDisclosure Standards made by the London Stock Exchange. The Offer will be subject to the conditions and further terms set out inAppendix I to this announcement. 3. Irrevocable undertakings Pendragon has received irrevocable undertakings to accept the Offer fromSchroder Investment Management Limited in respect of 3,016,261 Lookers Sharesand from Morley Fund Management Limited in respect of 1,470,198 Lookers Shares,representing in aggregate approximately 12.6 per cent. of the existing issuedshare capital of Lookers. These irrevocable undertakings will only cease to bebinding in the event that the Offer lapses or is withdrawn or a third partyannounces a firm intention to make an offer for the entire issued share capitalof Lookers at a price representing, in the opinion of the party giving theundertaking, an improvement of not less than 5 per cent. on the value of theOffer on the date on which the competing offer is announced. 4. Background to and reasons for the Offer (i) Background The changes to the Block Exemption rules in 2003 have enabled Pendragon topursue with more confidence its stated strategy of growing its business withselected manufacturer partners. The Block Exemption rules introduced thefollowing principal advantages for large dealer groups such as Pendragon: • greater certainty and opportunity for motor dealers as manufacturers are no longer able to terminate franchise agreements without clear and objective reasons. This allows dealers to take a longer term view and to build value in their businesses; • the ability to acquire franchised dealerships without prior approval from manufacturers provided that the acquirer already has at least one franchised dealership of the particular brand; • the ability to source parts from the original manufacturer rather than from the vehicle manufacturer; • greater ability to have more than one franchise on a single site; and • the ability to operate as a stand-alone authorised service and repair provider. In 2004, Pendragon successfully acquired the then second largest dealer group inthe UK, CD Bramall. That business has been successfully integrated withPendragon's business over the past two years. During the period since the CDBramall acquisition, Pendragon has also made a number of small dealershippurchases and added different franchises to some of its existing sites. On 14 February 2006, Pendragon's offer for Reg Vardy became unconditional in allrespects. Reg Vardy was the third largest dealer group in the UK. The process ofintegrating this new business is underway and the Company continues to believethat the benefits of the acquisition will be realised in accordance with itsexpectations. Pendragon has structured its organisation for growth by focusing its managementon individual franchises and by investing in the development and implementationof its in-house software and technology systems. Pendragon believes that it iswell positioned to participate actively in the consolidation of the motorretailing industry in the UK. Pendragon believes that its ability to optimisethe benefits of scale of any acquisition will be enhanced through efficienciesgained by the use of in-house technology systems which enable effectivemanagement and control of all aspects of its business. As announced on 27 January 2006, Pendragon made two formal approaches to theBoard of Lookers to discuss the terms of a possible acquisition. Since makingthat announcement, Pendragon and its advisers have made a number of furtherattempts to initiate meaningful discussions with the Board of Lookers and itsadvisers. These approaches have been rejected. (ii) Reasons for the Offer Pendragon continues to believe that the synergies available from a three-wayconsolidation of Lookers, Reg Vardy and Pendragon should be considerable and,through a share exchange offer, Lookers Shareholders would benefit from theproven track record of Pendragon management of integrating large acquisitionsand extracting synergies. The Board of Pendragon believes that the EnlargedPendragon Group will benefit from cost savings through the integration of theLookers' dealerships into the existing Pendragon infrastructure. In addition,Pendragon expects to benefit from economies of scale in purchasing as well asthe elimination of costs associated with Lookers' listed company status. The Board of Pendragon believes that the acquisition will become enhancing toearnings (before exceptionals) during the first twelve months of ownership aftertaking into account expected synergies (although this statement should not beinterpreted to mean that earnings per share of the Enlarged Pendragon Group willnecessarily be greater than or equal to those in prior years). Pendragon is confident that it has the management experience necessary tointegrate the businesses of both Reg Vardy and Lookers successfully. As aresult, it has decided to make this Offer directly to Lookers' Shareholders atthis time. 5. Information on Lookers Lookers is one of the leading multi-franchise motor retail groups in the UK,operating a network of more than 100 dealerships, vehicle servicing and partsdistribution facilities. The company, headquartered in Manchester, represents 13volume manufacturers and 10 premium manufacturers, with the majority of itssites being located in the North West of England and Northern Ireland. It hasparticularly well established relationships with certain manufacturers such asFord, Vauxhall and Renault on behalf of whom it operates (as disclosed in thescheme document sent to Reg Vardy shareholders dated 27 January 2006 and in thesubsequent announcement made by Lookers on 28 February 2006) 21, 17 and 13franchises respectively. The Ford brands represented are Aston Martin, Jaguar,Land Rover and Volvo. Other marques include Bentley, Ferrari, Honda, Maserati,Nissan, Toyota and Volkswagen. In the year ended 31 December 2004 (on a UK GAAP basis), Lookers' consolidatedturnover was £1,093.8 million (2003: £961.4 million) and profit before tax was£26.5 million (2003: £14.0 million). As at 31 December 2004, the gross assets ofLookers were £317.4 million and the net assets of Lookers were £85.7 million. Lookers announced its interim results for the six-month period ended 30 June2005 (on an IFRS basis) on 5 September 2005. In those interim results, Lookersreported turnover of £648.1 million (2004: £576.4 million), operating profitbefore amortisation and exceptional items of £15.0 million (2004: £11.8million), profit on ordinary activities before taxation of £13.1 million (2004:£25.9 million) and adjusted earnings per share of 22.3 pence (2004: 20.3 pence).As at 30 June 2005, the gross assets of Lookers were £412.3 million and the netassets of Lookers were £91.5 million. 6. Information on Pendragon The Pendragon Group is one of the largest UK motor car retailers, operating atotal of 382 franchises from 323 outlets in the UK and 22 franchises from 15outlets overseas. Pendragon has motor car franchises for Alfa Romeo, AstonMartin, BMW, Cadillac, Chevrolet, Chrysler Jeep, Daihatsu, Ferrari, Fiat, Ford,Honda, Hyundai, Isuzu, Iveco, Kia, Jaguar, Land Rover, LDV, Lotus, Maserati,Mercedes-Benz, MINI, Nissan, Peugeot, Porsche, Saab, smart, Subaru, Suzuki,Vauxhall and Volvo, together with franchises for Japanese and American motorcycles and heavy commercial vehicles. In addition to retailing new and usedmotor vehicles, Pendragon provides aftersales services and vehicle contract hireand leasing. Pendragon also sells computer software products to the motortrade, through its subsidiary, Pinewood Technologies PLC. Pendragon primarily operates in the UK but also has motor car retailingbusinesses in Germany and the USA. The Pendragon Group announced its preliminary results for the year ended 31December 2005 (on an IFRS basis) on 9 February 2006. In those preliminaryresults, the Pendragon Group reported turnover of £3,284.5 million (2004:£3,168.2 million), profit before tax and exceptional items of £59.3 million(2004: £53.1 million) and adjusted earnings per share of 33.4 pence (2004: 30.0pence). As at 31 December 2005, the gross assets of the Pendragon Group were£1,503.4 million and the net assets of the Pendragon Group were £252.6 million. 7. Current trading and prospects for the Pendragon Group In its statement of preliminary results for the year ended 31 December 2005,Pendragon made the following statement: "Last year we achieved our integration goals with CD Bramall and repaid the debtthat we incurred to buy that business and dealt with the closure of MG Rover.The new car market in the UK was less buoyant than the previous year andtherefore profits more difficult to achieve. January 2006 new car registrations in the UK were down by 13.3 per cent.compared to 2005. Some of the January fall can be attributed to the higher thannormal registrations of diesel cars in December 2005. Industry forecasts are fora UK car market down just under three per cent. for the whole of this year and adecline of 5 per cent. would be our current view. We are looking forward to a year of new challenges and believe that we can takethe business forward in 2006 and retain our position as the clear leader in theindustry." 8. Management and employees The Pendragon Board confirms that, following the Offer becoming or beingdeclared unconditional in all respects, the existing employment rights,including pension rights, of all the employees of Lookers will be fullysafeguarded. The Pendragon Board will, following the Offer becoming or beingdeclared unconditional in all respects, assume full responsibility for themanagement of the business currently carried out by the Board of Lookers. 9. Lookers Share Option Schemes The Offer will extend to any Lookers Shares which are issued or unconditionallyallotted fully paid (or credited as fully paid) before the date on which theOffer closes (or such earlier date as Pendragon may, subject to the City Code,determine being not earlier than the date on which the Offer becomes or isdeclared wholly unconditional as to acceptances or, if later, the Closing Date)pursuant to the exercise of options granted under the Lookers Share OptionSchemes. To the extent that options under the Lookers Share Option Schemes are notexercised before the date on which the Offer closes, and if the Offer becomes oris declared unconditional in all respects, Pendragon will make appropriateproposals to Lookers Option Holders in due course. 10. Compulsory acquisition, delisting and cancellation of trading If the Offer becomes or is declared unconditional in all respects, it is theintention of Pendragon, assuming it becomes so entitled, to acquire compulsorilyany outstanding Lookers Shares pursuant to the provisions of sections 428 to430F (inclusive) of the Act. Following the Offer becoming or being declared unconditional in all respects andsufficient acceptances being received, Pendragon intends to procure that Lookerswill apply for the cancellation of the listing of the Lookers Shares on theOfficial List and trading on the London Stock Exchange's market for listedsecurities. It is anticipated that such cancellation will take effect no earlierthan 20 business days after Pendragon has acquired or agreed to acquire 75 percent. of the voting rights attaching to the Lookers Shares. It is also proposedthat resolutions will be proposed to re-register Lookers as a private company.De-listing is likely to reduce significantly the liquidity and marketability ofany Lookers Shares in respect of which the Offer has not been accepted. 11. Listing, dealings and settlement Application will be made for the New Pendragon Shares to be admitted to theOfficial List of the UK Listing Authority and to trading on the London StockExchange's market for listed securities. It is expected that Admission will become effective and that dealings for normalsettlement in the New Pendragon Shares will commence on the first business dayfollowing the date on which the Offer becomes or is declared unconditional inall respects (save only for the Admission of such shares becoming effective).The New Pendragon Shares will carry the right to all dividends and otherdistributions declared, made or paid on or after the date on which the Offerbecomes or is declared unconditional in all respects, save for the PendragonFinal Dividend. 12. Pendragon Extraordinary General Meeting The Offer is a Class 1 transaction for Pendragon under the Listing Rules and istherefore conditional, inter alia, on the approval by Pendragon Shareholders ofthe Offer at an extraordinary general meeting. Accordingly, a circular conveningthe extraordinary general meeting will be posted to Pendragon Shareholders assoon as practicable. All of the Pendragon Directors intend to vote in favour ofthe necessary resolutions in respect of beneficial holdings of, in aggregate,6,971,438 Pendragon Shares (representing approximately 5.3 per cent. of theexisting ordinary share capital of Pendragon). 13. General Except for the irrevocable undertakings summarised in paragraph 3 and twoLookers Shares owned by Pendragon, neither Pendragon nor, so far as theDirectors of Pendragon are aware, any person acting in concert with it, has anyinterest in or right to subscribe for Lookers Shares or has any short position(including any short positions under a derivative, any agreement to sell or anydelivery obligation or right to require another person to take delivery) inLookers Shares or has borrowed or lent any Lookers Shares (save for any borrowedshares which have either been on-lent or sold). Your attention is drawn to the further information contained in the Appendiceswhich form part of this announcement. The full text of the conditions and certain further terms of the Offer set outin Appendix I to this announcement form part of, and should be read inconjunction with, this announcement. Appendix II to this announcement provides details of additional informationregarding the Offer, including the basis of calculations and sources of certaininformation included in this announcement. Appendix III to this announcement contains definitions of the terms used in thisannouncement. The Offer will be subject to the applicable requirements of the Code. The OfferDocument, Information Memorandum and Form of Acceptance setting out in full theterms and conditions of the Offer are expected to be posted to LookersShareholders not later than 28 days after the date of this announcement but itis anticipated that posting will not be before 30 March 2006. This announcement does not constitute, or form part of, any offer for or of, orany solicitation of an offer for or of, securities in any jurisdiction. Anyacceptance or other response to the Offer should be made only on the basis ofinformation contained in or referred to in the Offer Document and theInformation Memorandum. ENQUIRIES Pendragon PLCTrevor Finn, Chief ExecutiveDavid Forsyth, Finance DirectorTelephone: 01623 725 114 Citigroup Global Markets Limited(Financial adviser and corporate broker to Pendragon)Philip Robert-TissotSam SmallChris Zeal (Corporate Broking)Telephone: 020 7986 4000 Finsbury Group(Public relations adviser to Pendragon)Rupert YoungerGordon SimpsonTelephone: 020 7251 3801 Citigroup Global Markets Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forPendragon and for no one else in connection with the Offer and will not beresponsible to any other person for providing the protections afforded toclients of Citigroup Global Markets Limited or for providing advice in relationto the Offer. This announcement does not constitute, or form part of, any offer for or anysolicitation of an offer for, securities in any jurisdiction. Any acceptance orother response to the Offer should be made only on the basis of informationcontained in or referred to in the Offer Document and the InformationMemorandum. The Offer is not being and will not be made, directly or indirectly, in or into,or by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile transmission, electronic mail, telex or telephone)of interstate or foreign commerce of, or any facilities of a national securitiesexchange of, the United States, Canada, Australia or Japan and the Offer willnot be capable of acceptance by any such use, means, instrumentality orfacility, directly or indirectly from or within the United States, Canada,Australia or Japan. Accordingly, neither this Announcement nor the InformationMemorandum nor the Offer Document nor the Form of Acceptance is being, and mustnot be, mailed or otherwise forwarded, transmitted, distributed or sent in, intoor from the United States of America, Canada, Australia or Japan. Doing so mayrender invalid any purported acceptance of the Offer. All Lookers Shareholdersor other persons, (including nominees, trustees or custodians) who would orotherwise intend to, or may have a contractual or legal obligation to, forwardthis Announcement and/or the Information Memorandum and/or the Offer Documentand/or the Form of Acceptance to any jurisdiction outside the United Kingdom,should refrain from doing so and seek appropriate professional advice beforetaking any action. The Offer is not an offer of securities for sale in the United States of Americaor in any jurisdiction in which such an offer is unlawful. The New PendragonShares to be issued in connection with the Offer have not been, nor will theybe, registered under the US Securities Act of 1933, as amended, or under thesecurities laws of any state of the United States of America and may not beoffered or sold in the United States of America, absent registration or anapplicable exemption from registration. No public offering of the securitieswill be made in the United States of America. The relevant clearances have notbeen, and will not be, obtained from the securities commission of any provinceor territory of Canada; no prospectus or a prospectus equivalent has been, orwill be, lodged with, or registered by, the Australian Securities andInvestments Commission or the Japanese Ministry of Finance and the NewPendragon Shares have not been, and nor will they be, registered under oroffered in compliance with applicable securities laws of any state, province,territory or jurisdiction in Canada, Australia or Japan. Accordingly, PendragonShares may not (unless an exemption under relevant securities laws isapplicable) be offered, sold, resold or delivered, directly or indirectly, in orinto Canada, Australia or Japan or any other jurisdiction outside the UnitedKingdom if to do so would constitute a violation of the relevant laws of, orrequire registration thereof in, such jurisdiction or to, or for the account orbenefit of, a person located in Canada, Australia or Japan. This Announcement contains a number of forward-looking statements relating toPendragon and Lookers with respect to, among others, the following: financialconditions; results of operation; the businesses of Pendragon and Lookers;future benefits of the transaction; and management plans and objectives.Pendragon considers any statements that are not historical facts as "forward-looking statements". They involve a number of risks and uncertaintiesthat could cause actual results to differ materially from those suggested by theforward-looking statements. Important factors that could cause actual resultsto differ materially from estimates or forecasts contained in theforward-looking statements include, among others, the following possibilities:future revenues are lower than expected; costs or difficulties relating to thecombination of the businesses of Pendragon and Lookers, or of other futureacquisitions, are greater than expected; expected cost savings from thetransaction or from other future acquisitions are not fully realised or notrealised within the expected time frame; competitive pressures in the industryincrease; general economic conditions or conditions affecting the relevantindustries, whether internationally or in the places Pendragon and Lookers dobusiness are less favourable than expected, and/or conditions in the securitiesmarket are less favourable than expected. Except as required by the FSA, theLondon Stock Exchange or applicable law, Pendragon expressly disclaims anyobligation or undertaking to release publicly any updates or revisions to anyforward-looking statements contained in this announcement to reflect any changein Pendragon's expectations with regard thereto or any change in events,conditions or circumstances on which any statement is based. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Pendragon or of Lookers, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Pendragon or of Lookers, they will be deemed to be a singleperson for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Pendragon or of Lookers by Pendragon or Lookers, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Appendix I Conditions and certain Further Terms of the Offer PART A: CONDITIONS OF THE OFFER The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by not later than 3.00pm on the Closing Date in respect of suchnumber of Lookers Shares which, together with Lookers Shares acquired or agreedto be acquired by Pendragon before or during the Offer Period, will result inPendragon holding Lookers Shares which carry more than 50 per cent of the votingrights then normally exercisable at a general meeting of Lookers, including forthis purpose, to the extent (if any) required by the Panel, any such votingrights attaching to any Lookers Shares that are unconditionally allotted orissued before the Offer becomes or is declared unconditional as to acceptances,whether pursuant to the exercise of any outstanding conversion or subscriptionrights or otherwise and for this purpose Lookers Shares that have beenunconditionally allotted shall be deemed to carry the voting rights that theywill carry upon issue; (b) the passing at the Extraordinary General Meeting ofPendragon (or at any adjournment thereof) of all necessary resolutions toapprove, implement and effect the Offer and the acquisition by Pendragon ofLookers and of any Lookers Shares, including a resolution or resolutions toincrease the share capital of Pendragon and to authorise the creation andallotment of New Pendragon Shares; (c) the admission of the New Pendragon Shares (i) to listing onthe Official List of the UK Listing Authority becoming effective in accordancewith the Listing Rules of the UK Listing Authority and (ii) to trading on theLondon Stock Exchange's market for listed securities becoming effective inaccordance with the Admission and Disclosure Standards made by the London StockExchange from time to time, or (if Pendragon so determines and subject to theconsent of the Panel) the UK Listing Authority and the London Stock Exchangeagreeing to admit such shares to listing and trading respectively subject toallotment of such shares; (d) Pendragon not having discovered or otherwise having becomeaware that the Office of Fair Trading in the UK has referred or intends to referthe Acquisition or any matter arising therefrom or relating thereto to theCompetition Commission in the UK; (e) no relevant authority having intervened in a way that wouldor might reasonably: (i) make the Offer or its implementation or the acquisition bythe Offeror or any member of the Pendragon Group of any shares or othersecurities in, or control of, Lookers, void, illegal or unenforceable ordirectly or indirectly restrict, restrain, prohibit, delay or otherwisematerially interfere with the implementation of, or impose additional materialconditions or obligations with respect to, or otherwise challenge, the Offer orthe acquisition of any shares or other securities in, or control of, Lookers bythe Offeror or any member of the Pendragon Group; or (ii) require, impede, delay or prevent the divestiture, or alterthe terms of any proposed divestiture, by any member of the wider Lookers Groupor by any member of the wider Pendragon Group of all or any portion of theirrespective businesses (or any of them), assets or property or impose anylimitation on the ability of any of them to conduct their respective businessesor to own or continue to enjoy the benefits currently enjoyed in relation totheir respective assets or property or any part of them; or (iii) impose any limitation on or result in a delay in theability of any member of the wider Lookers Group or the wider Pendragon Group toacquire or to hold or effectively to exercise (whether directly or indirectly)all or any rights of ownership of shares or other securities (or the equivalent)in, or management control over, any member of the wider Lookers Group; or (iv) require any member of the wider Pendragon Group or the widerLookers Group to offer to acquire any shares or other securities (or theequivalent) or interest in any member of the wider Lookers Group and thePendragon Group owned by any third party; or (v) require the divestiture by any member of the wider PendragonGroup of any shares or other securities in Lookers; or (vi) impose any limitation on the ability of any member of thewider Lookers Group or the wider Pendragon Group to co-ordinate their respectivebusinesses, or any part of them, with the businesses of any other member of thewider Lookers Group or the wider Pendragon Group; or (vii) result in any member of the wider Lookers Group or the widerPendragon Group ceasing to be able to carry on business under any name underwhich it presently does so; or (viii) otherwise adversely affect the business, financial position,profits or prospects of any member of the wider Pendragon Group or of any memberof the wider Lookers Group; and all applicable waiting and other time periods during which any relevantauthority could intervene having expired, lapsed or terminated; (f) all necessary filings having been made, clearances obtainedand all appropriate waiting and other time periods under any applicablelegislation or regulations in any jurisdiction having expired, lapsed or beenterminated and all authorisations necessary or appropriate for, or in respectof, the Offer or the proposed acquisition of any shares or other securities in,or control of, Lookers by any member of the wider Pendragon Group or thecarrying on by any member of the wider Lookers Group or the wider PendragonGroup of its business having been obtained, in terms and in a form satisfactoryto Pendragon, from all relevant authorities or from any person or body with whomany member of the wider Pendragon Group or any member of the wider Lookers Grouphas entered into contractual arrangements and all such authorisations remainingin full force and effect and there has not been received any notice orintimation of an intention to revoke, or not to renew, any of the same and allapplicable statutory or regulatory obligations in any jurisdiction having beencomplied with; (g) there being no provision of any arrangement, agreement,licence, permit, franchise or other instrument to which any member of the widerLookers Group is a party or by or to which any such member or any of its assetsare or may be bound, entitled or subject and which, in consequence of the Offeror the Acquisition or the proposed acquisition of any shares or other securitiesin, or control of Lookers by Pendragon or any member of the wider PendragonGroup or because of a change in the control or management of any member of thewider Lookers Group or otherwise, would or might result in: (i) any monies borrowed by, or other indebtedness (actual orcontingent) of, or grant available to any such member of the wider Lookers Groupbeing or becoming repayable, or becoming capable of being declared repayable,immediately or prior to its stated maturity, or the ability of any such memberto borrow monies or incur any indebtedness being withdrawn or inhibited or beingcapable of being withdrawn or materially inhibited; or (ii) the creation or enforcement of any mortgage, charge orother security interest over the whole or any significant part of the business,property or assets of any such member of the wider Lookers Group, or any suchmortgage, charge or other security interest (whenever arising or having arisen)becoming enforceable; or (iii) any such arrangement, agreement, licence, permit, franchiseor other instrument or the rights, liabilities, obligations or interests of anysuch member of the wider Lookers Group under any such arrangement, agreement,licence, permit, franchise or other instrument being terminated or modifiedadversely or affected adversely or any action being taken, or any obligation orliability arising thereunder; or (iv) any assets or interests of any such member of the widerLookers Group being or falling to be disposed of or charged or any right arisingunder which any such asset or interest could be required to be disposed of orcharged; or (v) the rights, liabilities, obligations, interest or businessof any such member of the wider Lookers Group in or with any firm or body orperson, or any arrangements relating to such interest or business, beingterminated or adversely modified or affected; or (vi) any such member of the wider Lookers Group ceasing to beable to carry on business under any name under which it presently does so; or (vii) the financial or trading position or prospects of the widerLookers Group being adversely affected, and no event having occurred which, under any provision of such agreement,arrangement, licence, permit, franchise or other instrument to which any memberof the wider Lookers Group is a party or by or to which any such member or anyof its assets may be bound, entitled or subject, could or might, whether withthe giving of notice, effluxion of time or otherwise, result in or give rise toany of the events or circumstances as are referred to in paragraphs (i) to (vii)of this paragraph (g); (h) except as disclosed in the Lookers annual report andaccounts for the year ended 31 December 2004 ("Lookers' Financial Results") and/or otherwise publicly announced by Lookers by notifying a Regulatory InformationService prior to 9 March 2006 ("publicly announced"), no member of the widerLookers Group having, since 31 December 2004: (i) issued or agreed to issue or authorised or proposed theissue of additional shares of any class, or of securities convertible into, orrights, warrants or options to subscribe for or acquire, any such shares orconvertible securities (save as between Lookers and wholly-owned subsidiaries ofLookers and save for options granted, or the issue of any Lookers Shares uponexercise of options granted, under the Lookers Share Option Schemes prior to 31December 2004); or (ii) recommended, declared, paid or made or proposed torecommend, declare, pay or make any bonus, dividend or other distribution exceptto a member of the wider Lookers Group, save for the Permitted Lookers FinalDividend; or (iii) purchased, redeemed or repaid or announced any proposal topurchase, redeem or repay any of its own shares or other securities (whether ornot convertible into shares) or reduced or made any other change to any part ofits share capital; or (iv) issued, authorised or proposed or announced the issue of anydebentures or made, recognised or proposed or announced any change in its loancapital or, save in the ordinary course of business, incurred or increased anyindebtedness or contingent liability or become subject to any contingentliability other than to a wholly-owned subsidiary of Lookers; or (v) merged with or acquired any body corporate or acquired ordisposed of or transferred, mortgaged or encumbered any asset (including sharesand trade investments) or any right, title or interest in any asset, orundertaken any liability, other than in the ordinary course of business orproposed or announced any intention to propose any such merger, acquisition,disposal, mortgage or encumbrance (in each case other than in the ordinarycourse of business); or (vi) entered into or varied, or authorised, proposed or announcedits intention to enter into or vary any contract, transaction, arrangement orcommitment which is of a long term, unduly onerous or unusual nature ormagnitude or which would be restrictive on the business of any member of thewider Lookers Group or which involves or might reasonably be expected to involvean obligation of such a nature or magnitude or which is not in the ordinarycourse of business (including, without limitation, the acquisition or disposalof any interest in any undertaking or the implementation of any merger,demerger, reconstruction, scheme or amalgamation); or (vii) taken any corporate action or had any legal proceedingsinstituted or threatened against it or any order made for its winding-up(voluntarily or otherwise), dissolution or reorganisation or any analogousprocedures in any jurisdiction, or for the appointment of a receiver,administrator, administrative receiver, trustee or similar officer over all orany of its assets or revenues; or (viii) entered into, or varied the terms of any contract,arrangement or commitment with any of the directors of Lookers or seniorexecutives of any member of the wider Lookers Group; or (ix) been unable or having admitted in writing that it is unableto pay its debts or having stopped or suspended (or threatened to stop orsuspend) payment of its debts generally or ceased or threatened to ceasecarrying on all or a substantial part of its business; or (x) made or agreed or consented to any change to the terms ofany trust deed constituting the pension scheme(s) established for its directorsand/or employees and/or their dependants or to the benefits which accrue, or tothe pensions which are payable thereunder, or to the basis on whichqualification for or accrual or entitlement to such benefits or pensions arecalculated or determined, or to the basis upon which the liabilities of suchpension schemes are funded or made, or agreed or consented to any change to thetrustees involving the appointment of a trust corporation; or (xi) made any amendment to its memorandum or articles ofassociation; or (xii) waived or compromised any claim; or (xiii) entered into any agreement, arrangement or commitment orpassed any resolution or made any announcement, with respect to any of thetransactions, matters or events referred to in this paragraph (h); (i) except as disclosed in Lookers' Financial Results, or asotherwise publicly announced since 31 December 2004: (i) there having been no material adverse change in thebusiness, assets, financial or trading position or profits or prospects of anymember of the wider Lookers Group; (ii) there having been no litigation, arbitration proceedings,prosecution or other legal proceedings or investigation instituted, announced orthreatened by or against or remaining outstanding in respect of any member ofthe wider Lookers Group which in any such case is material in the context of theLookers Group taken as a whole; and (iii) no contingent or other liability having arisen which wouldor might reasonably be expected to materially adversely affect the business ofthe wider Lookers Group, taken as a whole; (j) Pendragon not having discovered that: (i) any financial or business or other information concerningthe wider Lookers Group disclosed at any time by or on behalf of any member ofthe wider Lookers Group (whether publicly or otherwise) to Pendragon eithercontains a misrepresentation of fact or omits to state a material fact necessaryto make the information contained therein not misleading, in either case, wherethe misrepresentation or omission is material in the context of the widerLookers Group taken as a whole; or (ii) any member of the wider Lookers Group is subject to anyliability, contingent or otherwise, which is not disclosed in Lookers' FinancialResults and which is material in the context of the Lookers Group taken as awhole; or (iii) there has been an emission, disposal, discharge, deposit,spillage or leak of waste or hazardous or harmful substances on or about or fromany property now or previously owned, occupied or made use of by any past orpresent member of the wider Lookers Group which could give rise to any liability(whether actual or contingent) or cost on the part of any member of the widerLookers Group which is or would be material in the context of the wider LookersGroup taken as a whole; or (iv) any past or present member of the wider Lookers Group hasnot complied with all applicable laws or regulations of any relevantjurisdiction in relation to environmental matters, which non-compliance would belikely to give rise to any liability (whether actual or contingent) or cost onthe part of any member of the wider Lookers Group which would be material in thecontext of the business of the wider Lookers Group taken as a whole; or (v) circumstances exist whereby a person or class of personswould be likely to have any material claim or claims in respect of any serviceprovided by or carried out by any past or present member of the wider LookersGroup; or (vi) there is or is likely to be any liability (whether actual orcontingent) or requirement of any past or present member of the wider LookersGroup to make good, repair, reinstate or clean up any property now or previouslyowned, occupied, made use of or harmed by any past or present member of thewider Lookers Group or any controlled waters under any environmentallegislation, regulation, notice, circular or order of any relevant authority orotherwise which is material in the context of the business of the wider LookersGroup taken as a whole. For the purposes of these conditions: (a) "relevant authority" means any government or governmental,quasi-governmental, supranational, statutory, regulatory or investigative body,court, trade agency, association, institution or professional or environmentalbody or any other regulatory body or person in any jurisdiction; (b) a relevant authority shall be regarded as having "intervened" if it has decided or intimated a decision to take, institute, implement orthreaten any action, proceeding, suit, investigation, reference or enquiry, ormade, enacted or proposed any statute, regulation, decision or order, or takenany other steps and "intervene" shall be construed accordingly; (c) "authorisations" mean authorisations, determinations,orders, grants, recognitions, confirmations, consents, licences, clearances,permissions, certificates and approvals; and (d) the "wider Lookers Group" means Lookers and its subsidiaryundertakings, associated undertakings and any other undertaking in which Lookersand such undertakings (aggregating their interests) have a significant interestand the "wider Pendragon Group" means Pendragon and its subsidiary undertakings,associated undertakings and any other undertaking in which Pendragon and suchundertakings (aggregating their interests) have a significant interest and, forthese purposes, "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given by the Act (but for this purpose ignoringparagraph 20(1)(b) of Schedule 4A of the Act) and "significant interest" means adirect or indirect interest in, in aggregate, 10 per cent or more of the equitycapital of an undertaking. Pendragon reserves the right to waive all or any of the above conditions, inwhole or in part, except conditions (a), (b) and (c). Pendragon shall be underno obligation to waive or treat as fulfilled any of conditions (d) to (j)inclusive by a date earlier than specified below notwithstanding that any of theother conditions of the Offer may at such earlier date have been fulfilled orwaived and/or that there are at such earlier date no circumstances indicatingthat any of such conditions may not be capable of fulfilment. If Pendragon is required by the Panel to make an offer for the Lookers Sharesunder Rule 9 of the Code, Pendragon may make such alterations to the aboveconditions as are necessary to comply with the provisions of that Rule. Unless the Panel otherwise agrees, the Offer will lapse unless the conditionsset out above (other than condition (a)) are fulfilled or (if capable of waiver)waived or, where appropriate, have been determined by Pendragon in itsreasonable opinion to be or to remain satisfied no later than 21 days after theClosing Date, or such later date as the Panel may agree. The Offer will lapse if the Acquisition is referred to the CompetitionCommission in the UK before 3.00 p.m. on the Closing Date. If the Offer lapses, the Offer will cease to be capable of further acceptanceand accepting Lookers Shareholders and Pendragon will cease to be bound by theForm of Acceptance submitted on or before the time when the Offer lapses. PART B: CERTAIN FURTHER TERMS OF THE OFFER (i) The Offer will be made on the terms and will be subject to theconditions which are set out in this Appendix I, those terms which will be setout in the Offer Document and the Form of Acceptance and such further terms asmay be required to comply with the provisions of the City Code. The Offer andany acceptance of the Offer will be governed by English law. This announcementdoes not constitute, or form part of, any offer for or any solicitation of anoffer for, securities in any jurisdiction. (ii) Fractions of New Pendragon Shares will not be allotted orissued pursuant to the Offer but will be disregarded. (iii) The Lookers Shares will be acquired by Pendragon fully paid upand free from all liens, equitable interests, charges, encumbrances, rights ofpre-emption and other third party rights or interests and together with allrights now or hereafter attaching thereto, including the right to receive andretain all dividends and other distributions (if any) declared, made or paid, orany other return of capital (whether by way of reduction of share capital orshare premium account or otherwise) made, on or after the date hereof, save forthe Permitted Lookers Final Dividend. (iv) If any dividend, other distribution or return of capital (otherthan the Permitted Lookers Final Dividend) is declared, made or paid on or afterthe date hereof which Pendragon does not directly receive the benefit of,Pendragon reserves the right to reduce the Exchange Ratio to reflect the valueof such dividend, other distribution or return of capital (other than thePermitted Lookers Final Dividend). The precise mechanics will be set out in theOffer Document. Any reduction to the Exchange Ratio will be only be made withthe consent of, and on a basis to be agreed with, the Panel. (v) The New Pendragon Shares will be issued free from all liens,equities, charges, encumbrances and other interests. The New Pendragon Shareswill be issued credited as fully paid and will rank equally in all respects withexisting Pendragon Shares and will rank pari passu for any dividends ordistributions declared, made or paid on or after the date on which the Offerbecomes unconditional in all respects, save for the Pendragon Final Dividend. (vi) The Offer is not being and will not be made, directly orindirectly, in or into, or by use of the mails of, or by any means orinstrumentality (including, without limitation, facsimile transmission,electronic mail, telex or telephone) of interstate or foreign commerce of, orany facilities of a national securities exchange of, the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility, directly or indirectly from or withinthe United States, Canada, Australia or Japan. Accordingly, neither thisAnnouncement nor the Offer Document nor the Information Memorandum nor the Formof Acceptance is being, and must not be, mailed or otherwise forwarded,transmitted, distributed or sent in, into or from the United States of America,Canada, Australia or Japan. (vii) The Offer is not an offer of securities for sale in the UnitedStates of America or in any jurisdiction in which such an offer is unlawful.The New Pendragon Shares to be issued in connection with the Offer have notbeen, nor will they be, registered under the US Securities Act of 1933, asamended, or under the securities laws of any state of the United States ofAmerica and may not be offered or sold in the United States of America, absentregistration or an applicable exemption from registration. No public offeringof the securities will be made in the United States of America. The relevantclearances have not been, and will not be, obtained from the securitiescommission of any province or territory of Canada; no prospectus or a prospectusequivalent has been, or will be, lodged with, or registered by, the AustralianSecurities and Investments Commission or the Japanese Ministry of Finance andthe New Pendragon Shares have not been, and nor will they be, registered underor offered in compliance with applicable securities laws of any state,province, territory or jurisdiction in Canada, Australia or Japan. Accordingly,Pendragon Shares may not (unless an exemption under relevant securities laws isapplicable) be offered, sold, resold or delivered, directly or indirectly, in orinto Canada, Australia or Japan or any other jurisdiction outside the UnitedKingdom if to do so would constitute a violation of the relevant laws of, orrequire registration thereof in, such jurisdiction or to, or for the account orbenefit of, a person located in Canada, Australia or Japan. (viii) Each Lookers Shareholder who accepts the Offer will be requiredin the Form of Acceptance to give certain undertakings, representations andwarranties, including with respect to matters relating to compliance withapplicable laws of any relevant jurisdictions outside the United Kingdom. Appendix II Additional Information 1. General Unless otherwise stated, financial information relating to Pendragon has beenextracted from the preliminary results of the Pendragon Group for the financialyear ended 31 December 2005. Unless otherwise stated, financial information relating to Lookers has beenextracted from the audited consolidated financial statements of the LookersGroup for the financial year ended 31 December 2004 and the unaudited interimresults for the six months ended 30 June 2005. 2. Share prices The closing middle market prices of Pendragon Shares and Lookers Shares havebeen derived from the Daily Official List. 3. Value of the Offer References to the value of the Offer for the whole of the issued share capitalof Lookers are based on 35,727,093 Lookers Shares in issue as at 8 March 2006and an Offer value of 725 pence for each Lookers Share. The Offer value of 725pence for each Lookers Share is based on a share price of 630 pence perPendragon Share (the Closing Price on 8 March 2006, being the business day priorto this announcement) and 1.15 Pendragon Shares to be issued for each LookersShare. 4. Issue of New Pendragon Shares The reference to the issue of New Pendragon Shares, and the percentage whichthese New Pendragon Shares would represent in terms of the issued ordinary sharecapital of Pendragon as enlarged by the Acquisition (assuming full acceptance ofthe Offer and exercise of all existing options under the Lookers Share OptionSchemes) is based on 35,727,093 Lookers Shares in issue as at 8 March 2006,139,645 outstanding options under the Lookers Share Option Schemes as at 31December 2004 and 131,201,720 Pendragon Shares in issue as at 8 March 2006. Appendix III Definitions The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Acquisition" the proposed acquisition by Pendragon of Lookers under the terms of the Offer "Act" the Companies Act 1985 (as amended) "Admission" admission of the New Pendragon Shares to the Official List in accordance with the Listing Rules and to trading on the London Stock Exchange's market for listed securities in accordance with the Admission and Disclosure Standards "Admission and the requirements contained in the publicationDisclosure 'Admission and Disclosure Standards' dated July, 2005Standards" (as amended from time to time) containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's market for listed securities "Announcement" this announcement "Australia" The Commonwealth of Australia, its states, territories and possessions "Block Exemption" the European Commission Block Exemption rules (Commission Regulation (EC) No. 1400/2002) "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-divisions thereof "CD Bramall" CD Bramall plc "Citigroup" Citigroup Global Markets Limited "City Code" or the City Code on Takeovers and Mergers"Code" "Closing Date" the final date upon which the Offer can become unconditional as to acceptances, being 21 days after the posting of the Offer Document, or such later date as the Panel may agree "Closing Price" the middle-market quotation of a share at the close of business on a particular trading day, as derived from the Daily Official List "Daily Official the Daily Official List of the London Stock ExchangeList" "Disclosure Rules" the disclosure rules and regulations made by the UK Listing Authority "Enlarged Pendragon the Pendragon Group as enlarged by the AcquisitionGroup" "Exchange Ratio" 1.15 New Pendragon Shares for each Lookers Share "Extraordinary the extraordinary general meeting of Pendragon toGeneral Meeting" approve, inter alia, the proposed acquisition by Pendragon of the entire issued and to be issued share capital of Lookers under the terms of the Offer "Form of Acceptance" the form of acceptance and authority relating to the Offer which will accompany the Offer Document "FSA" the Financial Services Authority "FSMA" the Financial Services and Markets Act 2000, as amended "IFRS" International Financial Reporting Standards adopted for use in the European Union "Information means the document equivalent to a prospectus to beMemorandum" issued to Lookers Shareholders in connection with the proposed issue of New Pendragon Shares and the application for Admission of such shares pursuant to the Offer "Japan" Japan, its cities and prefectures, territories and possessions "Listing Rules" the Listing Rules made by the UK Listing Authority under section 73A of FSMA "London Stock London Stock Exchange plcExchange" "Lookers" Lookers plc "Lookers Group" Lookers and its subsidiary undertakings "Lookers Option holders of Lookers OptionsHolders" "Lookers Options" options granted under the Lookers Share Option Schemes "Lookers Share the Lookers Executive Share Option Scheme, theOption Schemes" Lookers Company Share Scheme and the Lookers Key Executive Incentive Performance Plan "Lookers holders of Lookers SharesShareholders" "Lookers Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 25 pence each in the capital of Lookers and any further ordinary shares which are unconditionally allotted or issued on or prior to the date on which the Offer closes (or such earlier date or dates as Pendragon may, subject to the Code or with the consent of the Panel, decide) "New Pendragon Pendragon Shares proposed to be issued fully paid toShares" Lookers Shareholders pursuant to the Offer "Offer" the offer to be made by Citigroup on behalf of Pendragon to acquire all of the issued and to be issued Lookers Shares on the terms and subject to the conditions set out in the Offer Document, the Information Memorandum and the Form of Acceptance and including, where the context so permits, any subsequent revision, variation, extension or renewal of such offer "Offer Document" the offer document to be issued to Lookers Shareholders detailing the terms and conditions of the Offer "Offer Period" the period commencing on (and including) 27 January 2006 and ending at 3.00 p.m. on the Closing Date "Official List" the list maintained by the UK Listing Authority "Panel" the Panel on Takeovers and Mergers "Pendragon" or Pendragon PLC"Company" or"Offeror" "Pendragon the directors of PendragonDirectors" or "Pendragon Board" "Pendragon Final the proposed final dividend of 6.6 pence perDividend" Pendragon Share to be paid on 2 May 2006 to Pendragon Shareholders on the register of members of Pendragon at the close of business on 31 March 2006 "Pendragon Group" Pendragon and its subsidiary undertakings "Pendragon holders of Pendragon SharesShareholders" "Pendragon Shares" the ordinary shares of 25 pence each in the capital of Pendragon "Permitted Lookers such amount of the final dividend (if any) to be paidFinal Dividend" to Lookers Shareholders in respect of the year ended 31 December 2005 as does not exceed 10 pence (net) per Lookers Share "Reg Vardy" Reg Vardy plc "UK GAAP" generally accepted accounting principles applied in the United Kingdom "UK Listing the Financial Services Authority acting in itsAuthority" capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "UK" or the United Kingdom of Great Britain and Northern Ireland"United Kingdom" "US" or "United the United States of America, including the states ofStates" the United States and the District of Columbia, its territories and possessions and all areas subject to its jurisdiction The terms "subsidiary" and "subsidiary undertaking" as used in these definitionsshall have the meanings given by the Act. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PDG.LLOOK.L