Tycoon Petchey admits interest in Lookers bid

By This Is Money
Updated: 07:15 EDT, 3 May 2011

The potential buyer eyeing car dealership Lookers is a consortium led by veteran investor Jack Petchey, it emerged today.

Lookers: Refusing access to its books

Manchester-based Lookers announced last week it had 'firmly rejected' a 'highly speculative informal approach' but did not identify its suitor.

Mr Petchey's private investment vehicle Trefick, real estate firm Moor Park and venture capitalist Brett Palos said they were behind the approach – but that Lookers has refused access to its books.

'The approach, in respect of a potential cash offer, was made formally to the board of Lookers in writing. The parties have requested access to certain information in order to confirm the cash offer, but the board of Lookers has, to date, declined to provide this,' they said in a joint statement.

Shares in Lookers were up 3% earlier today but have since fallen back to trade 0.25p higher at 66p.

The car dealer, which has a market value of around £260m and competes with Inchcape and Pendragon, reported better-than-expected full-year profits in March, driven by a strong performance from its motor and car parts businesses and a reduction in costs.

The company posted a 7.7% rise in group revenues in 2010 to £1.9bn, while adjusted pre-tax earnings were up 19% to £33.6m.

It operates 124 showrooms selling brands such as Ford, Vauxhall, Nissan and Toyota. The company's largest shareholder is non-executive director Douglas Bramall, who owns just over 22% of the company.

Nick Bubb, a retail analyst at broker Arden Partners, said Lookers' refusal to allow Petchey and his associates access to its books meant the proposal was not 'much of a runner' at present.

He said: 'Everybody knows that Lookers has valuable freehold property interests, as well as valuable car parts wholesale assets, but unlocking that value is the name of the game and the Trefick consortium are clearly frustrated at the situation.'

Mr Petchey, 85, also manages property investment firm Petchey Holdings and Petchey Leisure, a management company for holiday resorts in Spain, Portugal and the UK.

Trefick, which already holds a 17.3% stake in Lookers, focuses on stock-exchange listed, property-asset-backed businesses.

Mr Petchey claims to be a genuine 'rags to riches' businessman, rising from office boy at 14 years old to a motor trade and property tycoon.

He set up the Petchey Group after the Second World War, growing the business from a single mini-cab to controlling a fleet of cars and car showrooms and then on to holiday properties abroad.

The East Londoner set up the Jack Petchey Foundation in 1999 to help young people in the capital. He has donated more than £65m to schools, clubs and projects, and he was awarded the OBE in 2004.

Mr Petchey is a serial stake builder in property and car companies. He previously invested in and then exited from Reg Vardy, the car dealership group, in 2007 at a profit.