Response to Pendragon

Lookers PLC
21 April 2006

                                                                   21 April 2006

                                  Lookers plc

              Response to Pendragon ('Pendragon PLC') Announcement


The Board of Lookers notes the announcement by Pendragon earlier today.  In the
opinion of the Lookers board, this statement by Sir Nigel Rudd remains totally
unconvincing in his arguments in favour of Pendragon's inadequate proposal.


Once more, Pendragon failed:

•    to substantiate how Lookers shareholders would benefit from becoming part 
     of a lower growth business like Pendragon; and

•    why Lookers shareholders should contemplate a transaction that could
     be significantly earnings dilutive for them.


Pendragon continues to:

•    cite selective and crude premia comparisons that your Board considers to be 
     misleading and irrelevant; and

•    attempt to mislead Lookers shareholders that they would get the same deal 
     as it offered to Vardy shareholders.  Your Board believes that it has
     conclusively demonstrated that the terms are worse.

Moreover, Pendragon appears to have acknowledged that there is a risk that some
manufacturers will refuse to trade with Pendragon and therefore that there is a
real risk that revenues will be lost.

Pendragon also acknowledges that it will only be protected by EU rules where it
already has a franchise of a particular brand.  Your Board would add that
Pendragon does not operate six of the seven brands that Lookers has indicated
that it considers to be at risk.


Profit forecast

Pendragon has questioned the deliverability of Lookers profit forecast. Lookers
board draws your attention to the following:

•    Pendragon makes no reference to Lookers 2006 Q1 statement (adjusted PBT up 
     90%);

•    in 2006 Q1, Lookers delivered 43% of the full year profit forecast;

•    the 2006 Q1 trading statement and profit forecast have both been reported 
     on by PricewaterhouseCoopers LLP and reviewed by Lookers financial adviser 
     NM Rothschild & Sons Limited

Also, Pendragon has chosen to rely on outdated brokers forecasts for Lookers the
majority of which were last updated more than two months ago prior to Lookers
preliminary results and prior to Lookers Q1 trading update.  This is another
deliberate attempt by Pendragon to mislead Lookers shareholders and is
illustrative of its questionable tactics.


Lookers performance

Lookers continues to outperform its peers and has exceptional growth prospects
as an independent company.

•    Lookers 2005 adjusted operating profit up 31% on 2004
•    Lookers 2005 adjusted PBT up 28% on 2004                      
•    Lookers 2005 adjusted eps up 22% on 2004

•    Lookers Q1 2006 adjusted operating profit up 71% on the same period in 2005
•    Lookers Q1 2006 adjusted PBT up 90% on the same period in 2005
     
•    Lookers 2006 forecast adjusted PBT up 39% on 2005                          
•    Lookers 2006 forecast adjusted eps up 30% on 2005
     
•    Pendragon 2005 forecast adjusted eps up just 11% on 2004     
•    Pendragon 2006 forecast adjusted eps up just 15% on 2005


Pendragon's growth rates are significantly lower than those of Lookers.


Recommendation

Shareholders should reject Pendragon's offer which the Board believes is neither
'full' nor 'fair'.  Ken Surgenor, Chief Executive said:

'Our results for the important first quarter demonstrate that we are
outperforming the market with a proven strategy and underpin the profit forecast
for 2006.  Pendragon has completely failed to address the important concerns we
have raised. Its offer significantly undervalues Lookers and comes with
significant risks.'


Responsibility

The Directors of Lookers accept responsibility for the information contained in
this document, except that the only responsibility accepted by them in respect
of the information contained in this document relating to Pendragon, its
subsidiary undertakings and the Directors of Pendragon which has been compiled
from published sources, is to ensure that such information has been correctly
and fairly reproduced and presented.  To the best of the knowledge and belief of
the Directors (who have taken all reasonable care to ensure that such is the
case) the information contained in this document is in accordance with the facts
and does not omit anything likely to affect the import of such information.


Enquiries:

Ken Surgenor
David Dyson
Lookers plc                                                  0161 291 0043

Richard Bailey
Andrew Thomas
N M Rothschild & Sons Limited                   0161 827 3800

Andrew Hayes
Nick Lyon
James Hill
Hudson Sandler                                           020 7796 4133

Christopher Wilkinson
Numis Securities                                         020 7776 1530


N M Rothschild & Sons Limited ('Rothschild'), which is authorised and regulated
by the Financial Services Authority in the United Kingdom, is acting for Lookers
in connection with the Offer and no one else and will not be responsible to
anyone other than Lookers for providing the protections offered to clients of N
M Rothschild & Sons Limited nor for providing advice in relation to the Offer.

This announcement contains statements that are or may be forward-looking with
respect to the financial condition, results of operations and businesses of
Lookers. These forward-looking statements include risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
There are a number of factors which could cause or may cause actual results or
developments to differ materially from those expressed or implied by such
forward-looking statements.


Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in
1% or more of any class of 'relevant securities' of Lookers or Pendragon, all '
dealings' in any 'relevant securities' of that company (including by means of an
option in respect of, or a derivative referenced to, any such 'relevant
securities') must be publicly disclosed by no later than 3:30pm (London time) on
the London business day following the date of the relevant transaction. This
requirement will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the 'offer period' otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an 'interest' in 'relevant securities' of Lookers or Pendragon, they
will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Lookers or Pendragon by Lookers or Pendragon, or by any of their
respective 'associates', must be disclosed by no later than 12:00 noon (London
time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.

'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by the virtue of any option
in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.


Sources and bases

The definitions, bases of calculations and sources of information are the same
as those contained in Appendix 6 of the Circular issued to Lookers shareholders
on 19 April 2006 with the exception of the references to the consensus forecast
earnings per share for Lookers and the brokers forecasts which form part of that
consensus which is sourced from Hemscott Group Limited, and the statement that
Lookers has delivered 43% of its full year profit forecast which is based upon
the £11.0 million profit contained in Lookers first quarter trading update
divided by £25.1 million contained in the full year profit forecast, sourced
from Appendices 1 and 2 of the Lookers defence document respectively.



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