Lookers leaves Vardy to Pendragon

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The Independent Online

The battle for control of the car dealership Reg Vardy ended in victory for Pendragon yesterday after the rival bidder, Lookers, said it had decided not to come back with a higher offer.

Pendragon, which won the contest with a 900p-a-share bid last Friday worth £506m, immediately said its offer of an all-share merger with its defeated rival Lookers remained on the table.

However, Lookers has already rejected Pendragon's overtures twice and showed no signs yesterday of a change of heart, saying it remained committed to its strategy of strengthening the business through organic growth and acquisitions.

Pendragon originally bid 800p a share for Reg Vardy - an offer that was irrevocably accepted by the group's chairman Peter Vardy, who holds a 16.6 per cent stake in the company. Lookers then came in with an offer worth 875p which was recommended by the Reg Vardy board. Pendragon subsequently went over the heads of the Lookers board by announcing it was prepared to buy Vardy for 800p and then merge with its rival bidder in an all-share deal to create a £900m-turnover business with 6 per cent of the UK's new car market.

Pendragon calculated it needed the support only of an extra 5.7 per cent of Vardy shares to thwart the higher Lookers offer. But after concluding it would not be able to muster even this small number of shares in support of a three-way merger plan, it decided to go ahead with the higher cash offer for Vardy.