US Edition
British car dealership Lookers is due to be taken private by a Canadian rival after 50 years as a London-listed company, marking the latest blow to the City’s stock market.
The company said it negotiated an all-cash deal with Alpha Auto Group, an Ontario-based car dealership chain, that values the company at £465m, a 35pc premium to its closing share price on Monday.
The move will come as a further blow to the London Stock Exchange (LSE), which is battling to remain globally relevant amid a raft of take-private deals and a string of companies moving their listings to the US.
Irish construction group CRH is shifting its listing from London to New York while Paddy Power-owner Flutter is also considering a US listing. Arm has snubbed London as it pursues a listing and mining group WE Soda recently hit out at British investors after cancelling plans to list here.
Lookers was founded in 1908 as a bicycles retailer before pivoting to sell cars. It has been listed on the LSE since 1973.
Its board has unanimously backed the takeover deal and the transaction has already won the support of investors who hold more than 40pc of the company’s shares, including TDR Capital, Artemis Investment Management, J O Hambro and Schroders.
The company’s shares jumped by a third to 118.5p in early trading.
Paul Van der Burgh, chairman of Lookers, said: “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.”
Kuldeep Billan, executive chairman of Alpha Auto Group, said: “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.”
Last year, Lookers posted pre-tax profits of £84m on revenues of £4.3bn. It employs around 6,500 people.
The dealer suffered a turbulent year in 2020 when it was forced to suspend its shares after failing to publish its accounts on time.
Alpha Auto Group will buy Lookers through its UK affiliate Global Auto Holdings Limited. The takeover is still subject to regulatory approval.