Constellation, through its Cinch Holdco UK business, has withdrawn its support for the Alpha Auto’s bid for Lookers and now intends to vote against the deal.
Constellation, parent company to Marshal Motors, Cinch, BCA and We Buy Any Car, owns a 19.2% share in Lookers.
Canadian firm Alpha Auto Group initially made an offer of 120p a share on 20 June and at the time said it had letters of support totalling 42% of Lookers. However, this percentage has been dropping over the past month as major Lookers shareholders sold some or all of their stock in the retailer. Before today’s announcement of Constellation’s plan to vote against the deal, Alpha Auto’s support had dropped to 30.5%.
Industry experts have suggested the original 120p bid, valuing Lookers at £465 million, could be countered by a third party. Constellation has not stated why it now intends to vote against the Alpha Auto Group bid. However, Auto Retail Agenda’s sources claim a counter-bid by a US dealer group Lithia is imminent. Lithia has a stated aim of growth through acquisition and recently bought Jardine Motors in the UK.
In a stock market statement by Alpha Auto’s takeover vehicle, called Global Auto Holdings, said the firm now had only 11.2% support.
Constellation has been approached for comment.
A statement by Lookers said the firm is “re-engaging with other shareholders to understand whether the resolutions required to effect the Scheme of Arrangement in order to implement the acquisition are capable of being passed”.
Shareholders are due to vote on the bid on 27 July.
Alpha Auto is owned and run by Canadian businessman Kuldeep Billan. Commenting on the initial bid, he said that the acquisition represented a “compelling opportunity to acquire one of the leading UK auto retail groups.
“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.”