Global Auto Holdings has increased its offer to takeover Lookers by nearly £40 million to £504.2m after some shareholders rejected the previous offer.

Global Auto Holdings is a sister company of Canada's Alpha Auto Group Holdings (AAG) and the business made the offer for Lookers in June as part of its plans to become a global automotive retailer.

Lookers’ directors intend to “recommend unanimously that Lookers shareholders accept” the deal.

Constellation Automotive, which owns Cinch, is a major shareholder of Lookers with a 19.52% stake and said it would vote against the previous offer of £465.4m last week.

Lookers has been re-engaging with other shareholders ahead of what was planned to be a general meeting in Salford today.

However, as the increased offer is to be implemented by way of a takeover offer, the board of Lookers has proposed to adjourn the general meeting indefinitely.

Global Auto Holding has a maximum of 28 days to publish an offer document and there will then be a period of 60 days for consideration of the offer from the date of publication.

There has been no announcement at this stage as to whether Cinch is happy with the increased offer from Global Auto Holding.

Lookers said the new offer from Global Auto Holdings represents an increase of 8.3% to the previous recommended offer of 120p per Lookers share announced on  June 20.

The dealer group's board had accepted the previous offer of £465.4m in June, with Mark Raban, Lookers chief executive, saying the offer would "create a business of greater scale to create a platform for future growth in the UK".

David Kendrick, UHY Hacker Young Manchester chief executive (pictured), said that now the 130p “suggested price” from Constellation has been met, the deal should proceed.

He said: "My expectation is that the deal will now go ahead.

"After looking like it was dead in the water it appears to be back on. I still think the offer is an unbelievable price for a fantastic business and highlights the substantial undervaluation the automotive retailer group PLCs have in my opinion."

Who is AAG?

AAG has 15 large scale dealership operations across Canada and the US and said its potential acquisition of Lookers is part of its plans to become a global automotive retailer.

AAG said it recognises the strength and importance of Lookers’ relationships with its OEM partners and it expects to build on these, allowing partners to benefit from AAG's "desire and capacity to invest in its facilities, be a proactive partner with respect to changes in the operating model (including the transition agency models by several OEMs) and to be a willing acquirer to grow its dealership site base to help its OEM partners achieve their respective goals".

Kuldeep Billan, founder and executive chairman of AAG, has previously said: “The proposed acquisition of Lookers represents a compelling opportunity to acquire one of the leading UK auto retail groups while partnering with fantastic OEM brands  and Lookers’ approximately 6,500 strong team members.

“We look forward to further  building upon Lookers’ strong original equipment manufacturer (OEM) relationships by being a trusted and reliable retail  partner while delivering strong volumes and a high level of customer experience across  a range of OEM ‘go to market’ strategies.