Lookers has ‘unanimously rejected’ the 725 pence per share offer which Pendragon announced yesterday.
Lookers said: “The board has no hesitation in rejecting this inadequate all share offer.”
Pendragon’s offer would value Lookers at £258.8 million.
The Lookers' board recommended to its shareholders that they take ‘no action whatsoever’ in relation to the offer as it ‘significantly undervalues the company’.
“The board believes the Pendragon offer presents considerable risk for Lookers' shareholders as a three-way merger with Pendragon so soon after Pendragon’s acquisition of Reg Vardy would involve major operational risk,” said Lookers in a statement to the London stock market.
Lookers will write to its shareholders soon, detailing its views on the offer after Pendragon’s offer has been posted.
Pendragon succeeded in a bidding war against Lookers for Reg Vardy in February.
What they are saying on the AM dealerforum:
"Just like the retail food business - especially now the 'convenience' outlets are getting mopped up by Tesco etc - our business is likely to offer increasingly LESS choice to the customer, whilst claiming to offer MORE. Once a few really big boys like Pendragon have squeezed all they can out of the franchised new car market, they'll start looking to take over the independents as well. What sort of customer choice will that be?"
"Is there no end to Pendragon's appetite? See they're intent on swallowing up Lookers as well now they've digested Vardy's. They're like a shark, cruising around swallowing up the smaller fish, and getting hungrier by the minute. Who's next I wonder? Maybe they will bite off more than they can chew before long."
Join the debate here.