Rejection of Pendragon offer

Lookers PLC
09 March 2006



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


9 March 2006


FOR IMMEDIATE RELEASE


Lookers plc ('Lookers' or the 'Company')


Rejection of offer (the 'Offer') made by Pendragon Plc ('Pendragon')


Further to the announcement made earlier today by the board of Pendragon, the
board of Lookers, as advised by Rothschild, has no hesitation in unanimously
rejecting this inadequate all share offer and recommends to Lookers shareholders
that they take no action whatsoever in relation to the Offer.

In relation to the terms of the Offer, the board of Lookers wishes to make the
following points:

  • The board of Lookers, after consultation with its advisers, unanimously
    believes that the Offer significantly undervalues Lookers and is not in the
    best interests of Lookers shareholders.  In arriving at this view, the board
    has taken into account the nature of the consideration being offered which
    is wholly in Pendragon's shares, the modest premium implied over the
    prevailing Lookers share price and the value of the assets owned and
    utilised by Lookers in the operation of its business.

  • Lookers has an exceptional management team in place supported by a strong
    workforce with market leading operational skills which have delivered
    consistent growth and value to shareholders.  It has been able to achieve
    this given the success of its decentralised dealer enfranchised model and
    exceptionally strong relationships with manufacturer partners.  The board
    therefore believes that Lookers is ideally placed to leverage the
    significant opportunities which exist to create further shareholder value by
    both organic and acquisitive growth.

  • The board of Lookers believes that the all share offer presents
    considerable risk for Lookers shareholders in so far as a three way merger
    with Pendragon so soon after Pendragon's acquisition of Reg Vardy would
    involve major operational risk.  In addition, the board believes that there
    would be a high degree of commercial risk for shareholders in the enlarged
    Pendragon group if the Offer were successful, with regard to the likely
    reaction from manufacturers and other stakeholders.

The board of Lookers notes the comment from the Chairman of Pendragon set out in
Pendragon's announcement made earlier today regarding its two formal approaches.
  The board of Lookers wishes to clarify that it has always been open to discuss
matters with Pendragon and its advisers and limited discussions have taken
place.  At the time of the initial approaches, the board of Lookers discussed
the matter with certain shareholders representing a significant proportion of
the issued share capital of Lookers who indicated that they would not be
receptive to an approach on the terms which were set out by the board of
Pendragon and its advisers.

The board of Lookers and its advisers has previously suggested to the board of
Pendragon and its advisers that they review the basis of their initial
approaches both in terms of the form of consideration offered and the valuation
being placed on Lookers.  Disappointingly, the board of Pendragon has decided
not to respond and to proceed unilaterally with its original proposal.

The board will write to shareholders in due course with its detailed views on
the offer after the Offer Document has been posted.  In the meantime, the board
strongly advises shareholders to take no action whatsoever in respect of the
offer.


Enquiries:

Ken Surgenor
David Dyson
Lookers plc                                                       0161 291 0043

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



Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in
1% or more of any class of 'relevant securities' of Lookers or Pendragon, all '
dealings' in any 'relevant securities' of that company (including by means of an
option in respect of, or a derivative referenced to, any such 'relevant
securities') must be publicly disclosed by no later than 3:30pm (London time) on
the London business day following the date of the relevant transaction.  This
requirement will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the 'offer period' otherwise ends.  If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an 'interest' in 'relevant securities' of Lookers or Pendragon, they
will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Lookers or Pendragon by Lookers or Pendragon, or by any of their
respective 'associates', must be disclosed by no later than 12:00 noon (London
time) on the London business day following the date of the relevant transaction.


A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.

'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities.  In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by the virtue of any option
in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website.  If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.

N M Rothschild & Sons Limited, 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.




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