After 50 years of being listed on the London Stock Exchange, a Canadian competitor has taken Lookers private. This is the latest hit to the City’s share market.
The company announced that it had negotiated a cash-only deal with Alpha Auto Group in Ontario, which valued the company at £465m. This is a premium of 35pc over its Monday closing share price.
The move is another blow for the London Stock Exchange, which is struggling to stay globally relevant in the face of a number of take-private transactions and companies moving to the US.
Irish Construction Group CRH has moved its listing to New York. Paddy Power’s owner Flutter also considers a US listing. Arm is ignoring London in its pursuit of a listing, and WE Soda has recently criticized British investors for cancelling their plans to list on the stock exchange.
Lookers began in 1908 selling bicycles before turning to cars. Since 1973, it has been listed at the London Stock Exchange.
The board of directors has unanimously approved the deal, and investors holding more than 40% of the shares of the company, such as TDR Capital and Artemis Investment Management have already backed it.
Early trading saw the company’s stock jump by a third, to 118.5p.
Paul Van der Burgh said, “After extensive engagement between parties, this offer represents an appealing opportunity for our investors to realize cash for their investment now at a significant discount to the current share price.”
We have taken a long time to review the impact of Bidco owning Lookers on its wider stakeholders. We are confident that their commitments will protect stakeholder interest.
“Bidco’s commitment to support our customers, our operations, our communities, and our talented and dedicated people is clear.”
Kuldeep Bhalla, Alpha Auto Group’s executive chairman, stated: “With the UK automotive retail market experiencing substantial changes, including the adoption new distribution models, the group is well-positioned to navigate this environment, with geographically diverse operations and an emphasis on operational excellence.”
Lookers reported a profit before tax of £84m last year on revenues of £4.3bn. Around 6,500 people are employed by Lookers.
After failing to submit its accounts in time, the dealer had a turbulent 2020. He was forced to suspend his shares.
Alpha Auto Group, through its UK affiliate Global Auto Holdings Limited, will purchase Lookers. The acquisition is subject to regulatory approval.