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Lookers PLC (LOOK)

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Wednesday 10 August, 2016

Lookers PLC

Proposed disposal of Parts Division

RNS Number : 7352G
Lookers PLC
10 August 2016
 

10 August 2016

 

 

Lookers plc 

("Lookers", "Group" or "Company")

 

Proposed disposal of Parts Division

 

Lookers  announces it has entered into a conditional agreement to sell its parts business ("Parts" or the "Parts Division") to Alliance Automotive UK Ltd ("Alliance Automotive"), on a debt free and cash free basis, for a consideration of £120 million payable in cash on completion (the "Transaction").

 

The Parts Division is a distributor of automotive parts which includes brands such as: BTN Turbo, FPS and Apec Braking. Alliance Automotive is part of Alliance Automotive Group, a major European distributor of automotive and commercial vehicle parts to the automotive aftermarket.

 

Highlights

 

·      Conditional agreement signed to sell the Parts Division for £120 million, payable in cash on completion

·      Transaction expected to complete by the end of October 2016

·      Lookers board believes the Transaction will enable the Group to create greater value for its shareholders

·      Intention is for proceeds of the Transaction to also be used to pursue acquisitions in the Group's motor division ("Motor Division") over the short and medium-term

-       Group is in advanced stages of negotiation on the acquisitions of two premium-branded car dealership businesses, which it hopes to announce shortly

·      Further Transaction details and a notice of a shareholder meeting to approve the Transaction will be communicated to shareholders via a Class 1 circular in due course

 

The Transaction is classified as a Class 1 transaction as defined by Chapter 10 of the UKLA Listing Rules. As such, the Transaction will be conditional upon shareholder approval. In addition, the Transaction will also be conditional on EU merger control clearance to be obtained by Alliance Automotive, as well as the delivery of certain property titles. Subject to fulfilling these conditions, the Transaction is expected to complete by the end of October 2016.

 

In the year to 31 December 2015, Parts generated sales of £218.8 million and underlying operating profit of £12.6 million and as at 31 December 2015, Parts had gross assets of £155.7 million. Given the current low level of interest rates available on cash deposits, the sale of the Parts business will be earnings dilutive to the Group until the capital can be successfully redeployed via acquisitions in the Motor Division. However, the Group has a strong track record of delivering successful acquisitions in recent years and the Board is confident of acquiring further businesses into the Motor Division in the short term.

 

Neil Davis, the Managing Director of Parts and a director of Lookers ("Director"), will remain with the Parts Division under Alliance Automotive's ownership and as such will no longer be a Director upon completion of the Transaction. 

 

Further details of the Transaction and a notice of a shareholder meeting to approve the Transaction will be communicated to the Company's shareholders via a Class 1 circular in due course.

 

Commenting on the Transaction, Lookers' CEO, Andy Bruce, said:

 

"I am pleased to announce this conditional agreement which the Board believes is in the best interest of shareholders. The offer from Alliance Automotive is an attractive one and will enable us to focus on what we do best; buying and selling cars, and adding value through acquisitions. We are already at advanced stages of negotiation on the acquisitions of two premium-branded car dealership businesses and hope to make further announcements on these in the coming weeks.

 

"I would also like to thank our colleagues in our Parts Division for their contribution to the wider Lookers business."

 

 

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Enquiries:

 

Lookers

Tel: 0161 291 0043

Andy Bruce, Chief Executive


Robin Gregson, Finance Director




Peel Hunt (Financial Adviser, Sponsor and Joint Broker)

Tel: 020 7418 8900

Dan Webster

George Sellar


Adrian Trimmings




Numis Securities (Joint Broker)

Tel: 020 7260 1000

Christopher Wilkinson


Tom Ballard




Bell Pottinger

Tel:  020 3772 2500

Nick Lambert


Victoria Geoghegan

Lucy Stewart




 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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