12th Apr 2006 16:11
Pendragon PLC12 April 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 12 April 2006 PENDRAGON PLC ("PENDRAGON") RESPONSE TO STATEMENT BY LOOKERS PLC ("LOOKERS") The Board of Pendragon notes today's announcement by Lookers relating to vehiclemanufacturer notifications which challenges Pendragon's statement that itsacquisition of Lookers would be low risk with regard to manufacturer relations.The Board of Pendragon confirms that it remains confident in its statement forthe reasons that were detailed in the Offer Document posted to Lookersshareholders on 6 April 2006. The Lookers announcement also refers to "other agreements" that have beenentered into with manufacturers, outside of their franchise agreements, underwhich Lookers has purportedly granted vehicle manufacturers certain rights on achange of control. Lookers shareholders should be aware that any provisionswhich attempt to limit changes of control of dealerships, where the purchaseralready has a franchise of the relevant brand, would not satisfy the BlockExemption rules of the European Union and should therefore not be enforceable. Furthermore, the Board of Pendragon questions how the interests of Lookersshareholders have been best served by Lookers entering into these "otheragreements". In Pendragon's experience, such change of control provisions areneither necessary nor desirable. The Board of Pendragon continues to believe that Pendragon's Offer for Lookersis compelling and offers Lookers shareholders the opportunity to align theirinvestment with a management team focussed on building value for shareholdersrather than one trying to assign it to vehicle manufacturers. Pendragon urges Lookers shareholders to accept the Offer as soon as possible butin any event by 1pm on 27 April 2006. ENQUIRIES Pendragon PLC Tel: 01623 725 114Trevor Finn, Chief ExecutiveDavid Forsyth, Finance Director Citigroup Global Markets Limited Tel: 020 7986 4000Philip Robert-TissotSam SmallChris Zeal (Corporate Broking) Finsbury GroupRupert Younger Tel: 020 7251 3801Gordon Simpson NOTE TO EDITORS: The Pendragon Offer Document, posted to Lookers shareholders on 6 April 2006,contained the following statement: "THE LOOKERS ACQUISITION IS LOW RISK WITH REGARD TO MANUFACTURER RELATIONS Within the European Union, the rules that govern the franchising relationshipbetween retailers like us and motor vehicle manufacturers were fundamentallychanged in 2003 in a way which strengthened the retailers' position. Amongstother things, we now have the unrestricted right to buy franchises if we alreadyhave a franchise of that particular brand. The rules also protect us fromdiscrimination at the hands of manufacturers, whether in relation to the supplyof new cars or any other aspect of the retailer/manufacturer relationship. Thismeans that, in addition to the good working relationships we have with ourmanufacturer partners, our franchises are safeguarded by the European Unionrules relating to our industry. In the course of making large acquisitions, it is inevitable for us that, withinthe acquired company, there will be a small number of brands where we do notpresently hold a franchise agreement. We will seek to negotiate with themanufacturers concerned and are confident that we will achieve a successfuloutcome. For example, in the case of Reg Vardy's Renault franchise, wesuccessfully negotiated to become a member of Renault's network." Citigroup Global Markets Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forPendragon and 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 any offer for, securities. Any acceptance or other response tothe Offer should be made only on the basis of information referred to in theOffer Document. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PDG.LLOOK.L