Posting of Circular

Lookers PLC
19 April 2006


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF 
AMERICA, CANADA, AUSTRALIA OR JAPAN

19 April 2006

FOR IMMEDIATE RELEASE

Lookers plc ('Lookers')

Posting of circular advising Lookers Shareholders to reject Pendragon's offer 
and a 2006 Profit Forecast

The Board of Lookers announces that it is today posting a circular (the '
Circular') setting out its detailed response to Pendragon's offer document and
recommending that Lookers shareholders reject Pendragon's inadequate offer of
1.15 Pendragon shares for every Lookers share

Lookers also announces today both its record Q1 trading results and its full
year 2006 forecast of adjusted profit before tax up 39% to not less than £25.1
million.  Adjusted EPS for 2006 is forecast to be not less than 49.0p, up by 30%
on 2005.  The basis of the preparation of this forecast, the assumptions on
which it is based, and the text of the letters which appear in the Circular are
set out in Appendix 1 to this announcement.

Commenting on the posting of the defence document, Ken Surgenor, Chief Executive
of Lookers said: 'Today's Q1 results and accompanying full year profit forecast
demonstrate conclusively that Pendragon's offer is wholly inadequate.  In
addition, shareholders' investment in Lookers' exceptional growth prospects
could be at severe risk if they choose to accept Pendragon shares.'

The text of a letter from Fred Maguire the Chairman of Lookers, contained in the
Circular is set out below:

'Dear shareholder

On 27 January 2006, Pendragon announced that it had made two formal approaches
to the Board of Lookers regarding a possible all-share offer for the Company.
As explained in my letter to you dated 31 January 2006, in considering and
rejecting those indicative approaches, the Board took into account the nature of
the consideration being offered and the inadequate premium over the prevailing
Lookers share price.

Despite our readiness to discuss any improvement in the terms of an offer by
Pendragon for your Company, Pendragon and its advisers expressed no willingness
to improve upon those terms.  Subsequently on 9 March 2006, Pendragon announced
its intention to make a hostile offer for Lookers. You will have recently
received an offer document from Pendragon, setting out its offer to acquire
Lookers on the basis of just 1.15 Pendragon shares for every single Lookers
share.

Your Board carefully considered this offer with its advisers as it does with all
strategic matters that affect shareholder value. The Board is convinced that
this offer very significantly undervalues Lookers and is not in shareholders'
best interests.  It therefore has no hesitation in advising shareholders to
reject this unsolicited offer and not to complete any form of acceptance.

This document will demonstrate why:

• Lookers has exceptional growth prospects as an independent company

• Pendragon's offer substantially undervalues your Company

• Pendragon's shares carry significant risk

YOU SHOULD RETAIN YOUR SHARES IN LOOKERS

This document contains a first quarter trading update for Lookers, supporting
the Board's positive outlook for the future. This update shows that adjusted
profit before tax for the first three months of the current year was up 90% to
£11.0 million (Q1 2005: £5.8 million).

This document also contains a 2006 profit forecast for Lookers which reinforces
the continuing strong growth prospects of your Company.  Lookers' Board is
forecasting adjusted PBT of not less than £25.1m equating to an adjusted EPS for
the year of 49.0p, growth of 30% on 2005.

Lookers has exceptional growth prospects

Because Pendragon is offering you its shares as consideration for your shares in
Lookers, your Board has considered carefully the prospects for earnings growth
in both Pendragon and Lookers.  It has concluded on the basis of historical,
current and prospective trading results that Lookers offers materially better
prospects for earnings growth than Pendragon. Accordingly, the Board has
concluded that Pendragon's offer should be rejected on the basis of the two
companies' relative growth prospects.

Pendragon's all-share offer significantly undervalues Lookers

The Lookers' Board believes that a fair exit value for Lookers is in excess of
920p per share in cash.  Pendragon's offer of 722p in shares is a discount of
more than 21% to this level.  The Board has therefore concluded that Pendragon's
offer should be rejected because it fundamentally undervalues Lookers.

Pendragon's all-share offer puts the value of your investment at risk

The Lookers Board has considered carefully the risks attaching to holders of
Pendragon shares. It has concluded there are three key areas of risk that should
be considered when assessing Pendragon's offer which are as follows:

• Pendragon is a highly indebted company.  Lookers' Board estimates Pendragon's
  financial commitments to be more than £1.4 billion;

• Four manufacturers have already notified Lookers that they will withdraw
  franchises in the event of a takeover by Pendragon resulting in £232 million of
  lost revenues; and

• Pendragon's own Information Memorandum acknowledges the material risks of
  failure to integrate the Lookers group. We believe that there are particular
  risks in relation to Lookers Northern Irish activities (2005 revenues: £349
  million) and to FPS, Lookers' successful non-franchised parts distribution
  business (2005 revenues: £76 million).

Pendragon has chosen not to offer you cash for your shares. If you accept this
offer, you will become exposed to the risks set out above.

Your Board has therefore concluded that Pendragon's offer should also be
rejected on the basis of the unacceptable risks Lookers' shareholders would face
if they were to accept the offer.

Management and strategy

Pendragon accuses Lookers of having a confused strategy. However, Lookers has
consistently focused on its strategy of developing high quality relationships
with a mix of volume and prestige manufacturers, and developing its presence in
complementary markets.  Meanwhile, Pendragon has frequently changed its stated
strategy to justify whichever opportunistic acquisition comes along.

Pendragon also states that management accountability is key.  However, Pendragon
has consistently failed to provide any insight into the synergies gained from
its acquisitions.  Furthermore, Pendragon also claims that an acquisition of
Lookers is low risk with regard to manufacturer relations.  However, your Board
has already told you that 26.5% of Lookers 2005 turnover is at risk if
manufacturers that are entitled to terminate their agreements, do so as a result
of a Pendragon takeover. Four manufacturers have notified Lookers of their
express intention not to do business with Lookers if it falls under Pendragon
ownership.

Pendragon's management has pursued a strategy that has resulted in lower growth,
compared with Lookers, and increased risk for its shareholders.  It is
understandable that Pendragon would wish to acquire your Company to offset the
results of its own strategy. It is not however, prepared to pay you a fair
price.  Pendragon's 722p offer is final.

Pendragon's management has made a number of crude and ill-judged statements.
Their own strategy is inconsistent and opportunistic. Do not allow Pendragon's
management to put the value of your investment at risk.

Recommendation

The Board of Lookers, which has been so advised by Rothschild, its financial
adviser, unanimously recommends that Lookers' shareholders reject Pendragon's
offer and take no action in respect of their shareholdings. In providing advice
to the Board of Lookers, Rothschild has taken into account the commercial
assessment of its Directors.

Your Directors will not be accepting Pendragon's offer in respect of their own
beneficial shareholdings. You are strongly advised not to sign any document
which Pendragon or its advisers send to you.

Yours sincerely
Fred Maguire
Chairman'

Further details of the matters referred to in this announcement are set out in
the Circular which is being posted to Lookers shareholders today and copies of
which will be available for collection at the offices of Addleshaw Goddard at
150 Aldersgate Street, London EC1A 4EJ and will be available on Lookers' website
(www.lookers.co.uk) shortly.  Copies of the Circular are being submitted to the
Financial Services Authority and will shortly be available for inspection at the
Financial Services Authority Document Viewing Facility, which is situated at 25
The North Colonnade, Canary Wharf, London E14 5HS (Tel: [phone]).

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

Terms used in the announcement shall, unless the context otherwise requires,
have the meaning given to them in Appendix 3 to this announcement.

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.

NM Rothschild & Sons Limited has given and not withdrawn its written consent to
the publication in this announcement of its name in the form and context in
which it appears.

PricewaterhouseCoopers LLP has given and not withdrawn its written consent to
the publication in this announcement of its name in the form and context in
which it appears.

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.

APPENDIX 1

PROFIT FORECAST FOR LOOKERS FOR THE YEAR ENDING 31 DECEMBER 2006

In the absence of unforeseen circumstances and on the bases and assumptions set
out below, the Directors of Lookers forecast that for the year ending 31
December 2006 adjusted profit before tax will be not less than £25.1 million. On
this basis, adjusted earnings per share (undiluted) will be not less than 49.0p.

Bases

 1. The profit forecast has been prepared on a basis consistent with the
    accounting policies that are expected to be used in Lookers' 2006 Annual
    Report.

 2. The profit forecast is based on the unaudited management accounts for the
    three months ended 31 March 2006 and a forecast for the nine months ending
    31 December 2006.

 3. Adjusted profit before tax is calculated before deducting the amortisation of
    intangible assets, impairment of goodwill and exceptional items (which
    include the bid defence costs).

 4. The estimated taxation charge of £7.53 million is calculated using an
    effective rate of 30%.

 5. The adjusted earnings per share (undiluted) has been calculated by dividing
    the forecast adjusted profit before tax for the year ending 31 December 2006
    of £25.1 million, less the estimated taxation charge of £7.53 million, by
    the forecast weighted average number of ordinary shares of 35,842,355 in
    issue during the year ending 31 December 2006.

Assumptions

The principal assumptions on which the profit forecast is based are set out
below:

 1. There will be no material change in the rates of interest, inflation or
    taxation (direct and indirect) from those currently prevailing.

 2. There will be no material acquisitions or disposals of businesses other than
    that already reported.

 3. There will be no material change in current levels of demand in the Group's
    principal markets caused by significant changes in economic or other
    factors.

 4. There will be no major disruptions to the business of the Group, its
    suppliers or customers by reason of natural disaster, extreme weather
    conditions, industrial disruption, civil disturbance or government action.

 5. There will be no change in legislation or regulatory requirements that will
    have a material impact on the Group's operations.

 6. There will be no material change in the present management or control of
    Lookers.


LETTER FROM NM ROTHSCHILD & SONS LIMITED IN RELATION TO THE PROFIT FORECAST

                                                    NM Rothschild & Sons Limited
                                                                  82 King Street
                                                                      Manchester
                                                                          M2 4WQ
Strictly Private & Confidential
Lookers plc
776 Chester Road
Stretford
Manchester
M32 0QH

19 April 2006

Dear Sirs

We have discussed with you as Directors of Lookers plc, the profit forecast
comprising adjusted profit before tax, profit before tax and adjusted earnings
per share of Lookers plc and its subsidiaries for the year ending 31 December
2006 (the 'Profit Forecast') and the bases and assumptions on which it has been
prepared. We have also discussed the accounting policies and basis of
calculation for the Profit Forecast with PricewaterhouseCoopers LLP, Lookers
plc's auditors, and we have considered their letter of today's date addressed to
both yourselves and ourselves on this matter.

On the basis of the foregoing, we consider that the Profit Forecast for which
you as Directors of Lookers plc are solely responsible, has been compiled with
due care and consideration.

This letter is provided to you solely in connection with Rule 28.3(b) of the
City Code on Takeovers and Mergers and for no other purpose.

Yours truly,

N M Rothschild & Sons Limited



                                                      PricewaterhouseCoopers LLP
                                                           101 Barbirolli Square
                                                             Lower Mosley Street
                                                               Manchester M2 3PW

The Directors
Lookers plc
776 Chester Road
Stretford
Manchester
M32 OQH

N M Rothschild & Sons
82 King Street
Manchester
M2 4WQ

19 April 2006

Dear Sirs

Lookers plc

We report on the profit forecast comprising the statement by Lookers plc (the '
Company') for the year ending 31 December 2006 (the 'Profit Forecast').

The Profit Forecast and the material assumptions, upon which it is based, are
set out in Appendix 2 of the circular issued by the Company dated 19 April 2006
(the 'Circular'). This report is required by Rule 28.3(b) of the City Code and
is given for the purpose of complying with that relevant Rule and for no other
purpose.

The work we have carried out on the Profit Forecast is solely for the purpose of
reporting to the Directors and to the Financial Adviser. Accordingly, we assume
no responsibility in respect of this report to Pendragon plc (the 'Offeror') or
any other person connected to, or acting in concert with the Offeror or to any
other person who is seeking or may in future seek to acquire control of the
Company (an 'Alternative Offeror') or to any other person connected to or acting
in concert with an Alternative Offeror.

Responsibilities

It is the responsibility of the directors of the Company (the 'Directors') to
prepare the Profit Forecast in accordance with the requirements of the City
Code.

It is our responsibility to form an opinion as required by Rule 28.3(b) of the
City Code as to the proper compilation of the Profit Forecast and to report that
opinion to you.

Basis of preparation of the Profit Forecast

The Profit Forecast has been prepared on the basis stated in Appendix 2 of the
Circular and is based on the unaudited management accounts for the 3 months
ended 31 March 2006 and a forecast for the nine months ending 31 December 2006.
The Profit Forecast is required to be presented on a basis consistent with the
accounting policies of the Company.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting
issued by the Auditing Practices Board in the United Kingdom. Our work included
evaluating the basis on which the historical financial information included in
the Profit Forecast has been prepared and considering whether the Profit
Forecast has been accurately computed based upon the disclosed assumptions and
the accounting policies of the Company. Whilst the assumptions upon which the
Profit Forecast are based are solely the responsibility of the Directors, we
considered whether anything came to our attention to indicate that any of the
assumptions adopted by the Directors which, in our opinion, are necessary for a
proper understanding of the Profit Forecast have not been disclosed or if any
material assumption made by the Directors appears to us to be unrealistic.

We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with reasonable
assurance that the Profit Forecast has been properly compiled on the basis
stated.

Since the Profit Forecast and the assumptions on which it is based relate to the
future and may therefore be affected by unforeseen events, we can express no
opinion as to whether the actual results reported will correspond to those shown
in the Profit Forecast and differences may be material.

Opinion

In our opinion, the Profit Forecast has been properly compiled on the basis of
the assumptions made by the Directors and the basis of accounting used is
consistent with the accounting policies of the Company.

Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants


APPENDIX 2

BASES OF CALCULATION AND SOURCES OF INFORMATION

1.1               Unless otherwise stated and subject to paragraph 1.2 below,
the financial and other information relating to the Lookers Group is derived
from Lookers' annual report and accounts for the year ended 31 December 2005,
the Profit Forecast and related information set out in Appendix 1, other
published annual reports and accounts of Lookers for the relevant periods and
other information made publicly available by the Lookers Group.

1.2               Financial information relating to the Lookers Group for the
periods prior to 31 December 2004 was prepared on the basis of UK GAAP. The
financial information for the year ended 31 December 2005 was originally
prepared on the basis of UK GAAP and was restated on a basis consistent with
IFRS (as published and explained by Lookers in a public announcement on 9 August
2005 (the 'IFRS Announcement')). Unless otherwise stated, the financial
information in this announcement for the financial year ended 31 December 2005
is as restated under IFRS and, unless otherwise stated, is derived from the IFRS
Announcement. Financial information relating to the Lookers Group for each year
contained in this announcement is based on its financial year end of 31
December.

1.3              Unless otherwise stated, information contained in this
announcement regarding market share, sector analysis and the size of, position
and growth in, UK automotive retail market in relation to the Lookers Group, its
competitors and to these markets generally, is based on Lookers' management
estimates and calculations sourced from Lookers' internal market databases and,
where applicable, is presented by reference to calendar years rather than
financial years.

1.4               Values stated throughout this announcement have been rounded
to the nearest whole number and are given to the stated number of decimal
places.

1.5               Bases of calculations and sources of information are provided
below in the order in which the relevant information appears in this
announcement; accordingly, where any such information is repeated in this
announcement, the underlying bases and sources are not.

1.6               The references to Pendragon's Offer have been extracted or
derived from the Offer Document.

1.7               The reference to Lookers forecast profit before tax of
£25.1million and the adjusted EPS figure of 49.0 pence is sourced from the
profit forecast contained at appendix 1, which has been reported on by
PricewaterhouseCoopers LLP.

1.8               The reference to Q1 trading adjusted profit before tax of
£11.0m is sourced from Lookers' Q1 trading statement issued on 19 April 2006 a
copy of which has been included in the Circular.

1.9               The reference to Pendragon's offer of 722 pence is based on
the share exchange ratio that Pendragon has offered of 1.15 Pendragon's shares
per single Lookers share multiplied by the latest closing price of 627.5 pence
per Pendragon share as at 17 April 2006 being the latest practicable date prior
to the publication of the defence document. The discount of 21% is based upon
the offer price of 722 pence divided by a price of 920 pence, being the price
that the Board believes to be a fair exit price for Lookers, minus 1 and
multiplied by 100.

1.10            The source of the information relating to estimated financial
commitments of more than £1.4billion is the annual report and accounts for
Pendragon for the year ended 2005. The pro-forma net debt has been calculated by
adding the net borrowings of Pendragon (£177.0m) to the net borrowings of Reg
Vardy (£21.5m) and adding in an amount of £510.7 million, representing the
purchase price for Reg Vardy (which was an entirely debt funded transaction)
inclusive of £13.7 million of estimated costs as set out in the Pendragon
revised offer document dated 14 February 2006. The estimate of Pendragon's
stocking loans is based upon vehicle stocking loans which incurred an interest
charge of £18.6 million during the financial year ended December 2005. On the
basis of a typical interest rate for vehicle stocking loans of 6%, it is
estimated that the average level of these stocking loans during the year was
£310m, being £18.6m divided by 6%. The reference to total estimated financial
commitments of £1.4 billion is based on a summation of the pro-forma net debt
(£709.2m), Pendragon's aggregate outstanding operating lease commitments
(£318.4m), Pendragon's pension obligations (£90.4m) and an estimate of £310m in
respect of stocking loans as detailed above.

1.11The source of the information relating to the potential lost revenues and
relating to Charles Hurst and to FPS is the Company's internal management
accounts for the year ended 31 December 2005.

APPENDIX 3

DEFINITIONS

The following definitions shall apply in this announcement unless the context
requires otherwise.

Board or Lookers Board                              the board of directors of Lookers

CAGR                                                Compound Annual Growth Rate

CD Bramall                                          CD Bramall plc, now CD Bramall Limited (Company No. 444 795)

Charles Hurst                                       means Charles Hurst Corporation Limited and its subsidiaries which
                                                    undertake the Group's trade in Northern Ireland under the name of '
                                                    Charles Hurst'

City Code                                           The City Code on Takeovers and Mergers

Directors                                           the directors of the Company

EMH or European Motor Holdings                      European Motor Holdings plc (Company No. 122207)

EPS                                                 earnings per share

EU                                                  European Union

FPS                                                 FPS Distribution Limited (Company No. 122207)

Group                                               Lookers and each of its subsidiary companies

Information Memorandum                              the Information Memorandum issued by Pendragon to Lookers
                                                    shareholders, in connection with its offer being equivalent to that
                                                    of a prospectus

Lookers or Company                                  Lookers plc (Company No. 111876)

Lookers Share Options Schemes                       means the Lookers Executive Share Options Scheme, the Lookers
                                                    Company Share Scheme, the Lookers Key Executive Incentive
                                                    Performance Plan and the Lookers Matching Share Plan

Lookers share                                       an ordinary share of 25p each in the capital of Lookers

Office of Fair Trading                              United Kingdom of Great Britain and office of the UK Department of
                                                    Trade and Industry

PBT                                                 profit before tax

Pendragon                                           Pendragon PLC (Company No. 2304195)

Reg Vardy                                           Reg Vardy plc (Company No. 611190)

Rothschild                                          N M Rothschild & Sons Limited

Taggarts                                            the business of JN Holdings Limited and its subsidiaries which
                                                    undertake the Group's trade in Scotland under the name of 
                                                    'Taggarts'

UK                                                  United Kingdom of Great Britain and Northern Ireland






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