Response to Stmt by Lookers
Pendragon PLC
12 April 2006
Not for release, publication or distribution, in whole or part, in, into or from
the United States, Canada, Australia or Japan.
FOR IMMEDIATE RELEASE 12 April 2006
PENDRAGON PLC ('PENDRAGON')
RESPONSE TO STATEMENT BY LOOKERS PLC ('LOOKERS')
The Board of Pendragon notes today's announcement by Lookers relating to vehicle
manufacturer notifications which challenges Pendragon's statement that its
acquisition of Lookers would be low risk with regard to manufacturer relations.
The Board of Pendragon confirms that it remains confident in its statement for
the reasons that were detailed in the Offer Document posted to Lookers
shareholders on 6 April 2006.
The Lookers announcement also refers to 'other agreements' that have been
entered into with manufacturers, outside of their franchise agreements, under
which Lookers has purportedly granted vehicle manufacturers certain rights on a
change of control. Lookers shareholders should be aware that any provisions
which attempt to limit changes of control of dealerships, where the purchaser
already has a franchise of the relevant brand, would not satisfy the Block
Exemption rules of the European Union and should therefore not be enforceable.
Furthermore, the Board of Pendragon questions how the interests of Lookers
shareholders have been best served by Lookers entering into these 'other
agreements'. In Pendragon's experience, such change of control provisions are
neither necessary nor desirable.
The Board of Pendragon continues to believe that Pendragon's Offer for Lookers
is compelling and offers Lookers shareholders the opportunity to align their
investment with a management team focussed on building value for shareholders
rather than one trying to assign it to vehicle manufacturers.
Pendragon urges Lookers shareholders to accept the Offer as soon as possible but
in any event by 1pm on 27 April 2006.
ENQUIRIES
Pendragon PLC Tel: 01623 725 114
Trevor Finn, Chief Executive
David Forsyth, Finance Director
Citigroup Global Markets Limited Tel: 020 7986 4000
Philip Robert-Tissot
Sam Small
Chris Zeal (Corporate Broking)
Finsbury Group
Rupert Younger Tel: 020 7251 3801
Gordon Simpson
NOTE TO EDITORS:
The Pendragon Offer Document, posted to Lookers shareholders on 6 April 2006,
contained the following statement:
'THE LOOKERS ACQUISITION IS LOW RISK WITH REGARD TO MANUFACTURER RELATIONS
Within the European Union, the rules that govern the franchising relationship
between retailers like us and motor vehicle manufacturers were fundamentally
changed in 2003 in a way which strengthened the retailers' position. Amongst
other things, we now have the unrestricted right to buy franchises if we already
have a franchise of that particular brand. The rules also protect us from
discrimination at the hands of manufacturers, whether in relation to the supply
of new cars or any other aspect of the retailer/manufacturer relationship. This
means that, in addition to the good working relationships we have with our
manufacturer partners, our franchises are safeguarded by the European Union
rules relating to our industry.
In the course of making large acquisitions, it is inevitable for us that, within
the acquired company, there will be a small number of brands where we do not
presently hold a franchise agreement. We will seek to negotiate with the
manufacturers concerned and are confident that we will achieve a successful
outcome. For example, in the case of Reg Vardy's Renault franchise, we
successfully negotiated to become a member of Renault's network.'
Citigroup Global Markets Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
Pendragon and no one else in connection with the Offer and will not be
responsible to any other person for providing the protections afforded to
clients of Citigroup Global Markets Limited or for providing advice in relation
to the Offer.
This announcement does not constitute, or form part of, any offer for, or any
solicitation of any offer for, securities. Any acceptance or other response to
the Offer should be made only on the basis of information referred to in the
Offer Document.
This information is provided by RNS
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