By Mark McSherry
Canadian car dealer network Alpha Auto Group Holdings LP (AAG) has agreed to buy Altrincham-based car dealership Lookers plc for £465.4 million in cash and take it private, the companies said on Tuesday.
Alpha Auto Group’s offer, made through an entity called Global Auto Holdings Ltd, values Lookers at 120p per share, a premium of 35.3% to the stock’s closing price on Monday.
Alpha Auto Group is a private, Canada-headquartered operator and consolidator of auto retail dealerships with 15 large scale new vehicle dealerships across Canada and the United States.
Lookers interim chairman Paul Van der Burgh said: “The significant financial and operational progress made by Lookers in recent years demonstrates Lookers’ ability to deliver excellent and sustainable value for our stakeholders.
“After a period of extensive engagement between the parties, the offer represents an attractive opportunity for our shareholders to realise cash now for their investment at a significant premium to the prevailing share price.
“We have spent considerable time reviewing the potential impact of Bidco’s ownership on Lookers’ wider stakeholders and are confident that the commitments given by them will protect stakeholder interests.
“Bidco has clearly outlined its commitment to continue supporting our customers, operations, communities, and most importantly our talented and committed people.”
Lookers CEO Mark Raban said: “Today’s offer reflects the transformational progress that has been made in recent years. We have harnessed our strong market position, enhanced our brand relationships, and executed well against our six strategic priorities.
“I am excited about the combination with Bidco. It will create a business of greater scale, and bring together two successful businesses with complementary OEM relationships, and a strong platform to support future growth in the UK.”
AAG executive chairman Kuldeep Billan said: “The proposed acquisition of Lookers represents a compelling opportunity to acquire one of the leading UK auto retail groups while partnering with fantastic OEM brands and Lookers’ approximately 6,500 strong team members.
“We look forward to further building upon Lookers’ strong OEM relationships by being a trusted and reliable retail partner while delivering strong volumes and a high level of customer experience across a range of OEM ‘go to market’ strategies.
“With the UK auto retail market undergoing substantial change, including the adoption of new distribution models, we believe that the wider group is well positioned to navigate the current environment with geographically diversified operations and a focus on operational excellence.
“The wider group will benefit from the continuity of Lookers’ executive team, our shared values and an unwavering commitment to operating with the highest levels of integrity for the benefit of all stakeholders.
“We are deeply committed to the UK and look forward to further establishing our presence in the market over the long term.”