£465m takeover of Lookers set to collapse as shareholder Cinch opposes deal
Shares in Lookers slid by more than 10% in early trading as the move appeared to doom the takeover.
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Your support makes all the difference.The £465 million takeover of car dealership group Lookers is set to collapse after a major shareholder said it planned to block the move.
Last month, the board of Lookers said it had agreed the sale of the company to Global Auto Holdings, an entity linked to privately owned Canadian car dealer network Alpha Auto Group.
However, on Thursday, online car retail business Cinch, which owns a 19.5% stake in Lookers, confirmed it opposes the deal.
As a result, shares in Lookers slid by more than 10% in early trading as the move appeared to doom the takeover.
Cinch issued a letter of intent stating that it plans to vote against the Global Auto takeover bid, when it is voted on by Lookers shareholders at a meeting on Thursday July 27.
Following the announcement, Lookers told shareholders it now believes its vote will not secure the 75% backing needed to pass the deal.
“Lookers directors now believe that shareholders representing in excess of 25% of the voting rights of the company intend to vote against the resolutions and therefore that the resolutions are not capable of being passed,” it said in statement to the stock market.
“In the event that the resolutions do not pass, as the Lookers directors now expect, the scheme of arrangement will lapse and Lookers will remain an independent listed company.”
Lookers reported a pre-tax profit of £84.4 million last year on revenue of £4.3 billion. It employs around 6,500 people.
Founded in Manchester in 1908 by John Looker, the business originally sold bicycles, and the occasional used car. The business quickly switched to selling mainly cars, and in 1973 it listed on the London Stock Exchange.