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UK Car Dealers Lookers Face Obstacles in Their Bid for Global Auto Takeover

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UK Car Dealers and shareholders are opposing the deal in which Global Auto Holdings, affiliated with Canada’s Alpha Auto Group, aimed to buy Lookers for approximately $601 million.

Lookers, the UK car dealership, stated that shareholders representing approximately 25 percent of its voting rights intend to oppose the proposed acquisition by Global Auto Holdings, making the deal unlikely to succeed.

“In the event that the resolutions related to the proposed deal do not pass, as expected by the Lookers directors, the scheme of arrangement will lapse, and Lookers will continue to operate as an independent listed company,” the UK Car Dealers stated in an updated statement after an initial disclosure before the market opened.

After the second statement, shares in Lookers experienced a further decline, plummeting by as much as 17 percent to 98.8 pence ($1.68). Earlier on Thursday, they were trading approximately 15 percent lower.

Last month, Global Auto Holdings, an entity associated with the privately-owned Canadian car dealer company Alpha Auto Group, announced its intention to purchase Lookers for approximately 465.4 million pounds ($780 million) in cash, pending shareholder approval.

Scheduled for July 27, court and general meetings will be held to seek approval for the proposed deal.

On Thursday, Lookers stated that it had engaged in discussions with some of its investors to evaluate their voting intentions after top shareholder Cinch Holdco UK announced its opposition to the deal.

In a separate statement on Thursday, Global Auto Holdings revealed that Cinch had withdrawn its letter of intent and expressed its intention to vote against the acquisition.

Lookers stated that it would maintain efforts to engage constructively with all shareholders, including Cinch, which holds a stake of 19.52 percent in the London-listed company.

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