The Lookers PLC (LON: LOOK) share price surged 35% after agreeing to a binding all-cash offer for the company by Bidco, which is a subsidiary of a Canadian auto dealership Alpha Auto Group Holdings LP, to buy all its outstanding shares for 120p in cash.
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The takeover is set to be executed via a court-sanctioned scheme, with the takeover price valuing the company at approximately £465.4 million. Bidco already has the support of about 42% of Lookers’ shareholders, and it is hard to see why the rest of the shareholders would not vote for the deal.
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Following the acquisition, Lookers will become part of Alpha Auto Group Holdings LP (AAG), a private, Canada-headquartered, leading operator and consolidator of retail auto dealerships with 15 large-scale new vehicle dealerships across Canada and the United States.
AAG believes that the deal will allow it to enter the UK car dealership industry by acquiring one of the UK's leading integrated automotive retail and service groups with significant competitive advantages, complementary values and strong alignment with Bidco.
Bidco views Lookers as a crucial pillar in its vision of becoming a leading global auto retail group, which will enhance geographic diversification and stability for both businesses.
AAG has seven dealerships in the US and ten in its home market of Canada and is looking to become a global automotive car dealership group. AAG acquired Lookers mainly to combine two strong and experienced management teams.
Combining the two company’s management teams will allow the Wider Group to effectively manage changes in the global operating environment, drive best practices across the businesses, and position the broader business for future organic and inorganic growth.
Kuldeep Billan, Director of Bidco and Executive Chairman of AAG, 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.”
*This is not investment advice.
Lookers share price.
The Lookers’ share price surged 35.03% to trade at 119.5p, from Monday’s closing price of 88.5p.
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