Proposed Firm Placing and Pla

RNS Number : 5936U

Lookers PLC

26 June 2009

 



THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR THEIR RESPECTIVE TERRITORIES OR THE UNITED STATES ('RESTRICTED JURISDICTIONS').  NOTHING IN THIS ANNOUNCEMENT IS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER RESTRICTED JURISDICTION OF ANY SECURITIES REFERENCED HEREIN. SUCH SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT OF 1933, AS AMENDED. NO PUBLIC OFFERING OF THE SECURITIES IS BEING OR WILL BE MADE IN THE UNITED STATES. 

26 June 2009

Lookers plc

Proposed Firm Placing and Placing and Open Offer and amendment of banking facilities

The Board of Lookers plc ('Lookers' or the 'Company') today announces a proposed fully underwritten Firm Placing and Placing and Open Offer (the 'Fundraising') to raise gross proceeds of approximately £80.7 million. In addition, the Board today announces proposed amendments to the terms of the Group's banking facilities, conditional upon the Fundraising.

Highlights

• Fully underwritten Firm Placing and Placing and Open Offer to raise gross proceeds of approximately £80.7 million (approximately £76.5 million net of expenses):

-	201,856,192 New Ordinary Shares in the capital of the Company at the Issue Price of 40 pence per New Ordinary Share, representing a discount of 19% to the Closing Price of the Shares on 25 June 2009
-	The New Ordinary Shares to be issued will represent approximately 52.6% of the Enlarged Issued Share Capital following the Fundraising
-	50,464,048 New Ordinary Shares issued to investors through the Firm Placing
-	151,392,144 New Ordinary Shares issued through the Conditional Placing subject to clawback by Qualifying Shareholders to satisfy their basic shareholder entitlement of 5 New Ordinary Shares for every 6 Existing Shares

• The Directors believe the Fundraising will strengthen the Group's financial position as a result of reduced borrowings and provide flexibility from which to pursue the Group's future development strategy.

• Net Proceeds will be used to pay down debt and assist in securing more favourable terms on the Group's banking facilities. The Company will be able to:

-	repay a £50 million high interest loan, reduce a term loan by £15 million and reduce a revolving credit facility by £11.5 million (which will remain available for further withdrawals)
-	benefit from amended banking facility terms (the 'Amended Banking Facility Agreement'), which will reduce interest charges and fees, remove certain onerous banking obligations and improve flexibility

• The Fundraising is supported by Lookers' largest shareholders, Tony Bramall and Trefick Limited.

• The Amended Banking Facility Agreement is conditional on the Fundraising completing and part of the Net Proceeds being used to pay off existing debt facilities.

• The Fundraising is subject to approval by the Company's Shareholders at the General Meeting.

• Commenting on the proposals, Phil White, the Chairman of Lookers, said:

'Lookers has established a solid basis for protecting profitability in the current difficult trading environment and is trading relatively resiliently. The Group's balance sheet will be strengthened significantly as a result of the Firm Placing and Placing and Open Offer. The improved capital structure will provide significant flexibility to enable the Group to pursue its development strategy and capitalise on opportunities as the market recovers.'

Rothschild is acting as financial adviser and joint sponsor to Lookers with respect to the Fundraising. Numis is acting as lead underwriter, joint broker, joint sponsor and sole bookrunner with respect to the Fundraising.  KBC Peel Hunt are acting as joint underwriter and joint broker with respect to the Fundraising.

A prospectus and circular to shareholders relating to the Fundraising will be available on Lookers' website, www.lookers.co.uk, in due course following approval by the UK Listing Authority and will contain further details and the full terms and conditions of the Firm Placing and Placing and Open Offer.

Indicative timetable and key dates

Each of the times and dates in the table below are indicative only and may be subject to change:

Announcement of the Firm Placing and Placing and Open Offer	26 June 2009
Anticipated posting of the Prospectus, Form of Proxy and the Non-CREST Application Form	early July
Anticipated date of General Meeting	late July
Anticipated admission and commencement of dealings in the New Ordinary Shares	late July

This summary should be read in conjunction with the full text of this Announcement.

For further information, please contact:

Lookers plc	[phone]
Phil White
Ken Surgenor
Peter Jones
Robin Gregson
Rothschild (Financial Adviser and Joint Sponsor)
Richard Bailey	[phone]
Adam Young	[phone]
Numis (Lead Underwriter, Joint Broker, Joint Sponsor and Sole Bookrunner)	[phone]
Chris Wilkinson
Oliver Cardigan
KBC Peel Hunt (Joint Underwriter and Joint Broker)	[phone]
Julian Blunt
Matt Goode
Hudson Sandler (Public Relations Adviser)	[phone]
Andrew Hayes
Kate Hough

Shareholder enquires

If you have questions, please telephone the shareholder helpline operated by the Registrar on the numbers set out below. This shareholder helpline is available from 9.00 a.m. to 5.00 p.m. London time, Monday to Friday (except bank holidays). Calls to this number are charged at ten pence per minute if calling from a BT landline; other telephone providers' charges may vary. Please note that the shareholder helpline cannot give investment advice.

Shareholder helpline telephone numbers:

0871 664 0321 (inside the United Kingdom) or [phone] (outside the United Kingdom)

  Cautionary note regarding forward-looking statements

Some of the information in this announcement may contain forward-looking statements which reflect the Group's or, as appropriate, the Directors' current views with respect to financial performance, business strategy, plans and objectives of management for future operations (including development plans relating to the Group's products and services). These statements include forward-looking statements both with respect to the Group and the sectors and industries in which the Group operates. Statements which include the words 'expects',  'intends',  'plans',  'believes',  'projects',  'anticipates', 'will', 'targets', 'aims', 'may', 'would', 'could', 'continue' and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Group's actual results to differ materially from those indicated in these statements. Any forward-looking statements in this announcement reflect the Group's current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial conditions and growth strategy.

Forward-looking statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  

Important notice:

This announcement has been issued by and is the sole responsibility of Lookers.

N M Rothschild & Sons Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as joint sponsor and financial adviser to the Company in connection with the Firm Placing and Placing and Open Offer and will not be responsible to any person other than the Company for providing the protections afforded to its customers, or for advising any such person on the contents of this announcement or any other transaction, arrangement or matter referred to herein.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as joint sponsor, joint broker and lead underwriter in connection with the Firm Placing and Placing and Open Offer and will not be responsible to any person other than the Company for providing the protections afforded to its customers, or for advising any such person on the contents of this announcement or any other transaction, arrangement or matter referred to herein.

KBC Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as joint underwriter and joint broker in connection with the Firm Placing and Placing and Open Offer and will not be responsible to any person other than the Company for providing the protection afforded to its customers, or for advising any such person or the contents of this announcement or any other transaction, arrangement or matter referred to herein.

This announcement is an advertisement. It is not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information contained in the Prospectus which is to be published in due course. The Prospectus, when published, will be made available on Lookers' website and will be available for inspection at the UK Listing Authority's announcement viewing facility.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire New Ordinary Shares, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Firm Placing and Placing and Open Offer or otherwise.

The information in this announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the 'Securities Act'). The securities mentioned herein may not be offered or sold in the United States except pursuant to an exemption form the registration requirements of the Securities Act. There will be no public offer of securities in the United States. 

The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the Restricted Jurisdictions.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this information in whole or in part is unauthorised. Failure to comply with this restriction may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

Any person receiving this announcement is advised to exercise caution in relation to the Firm Placing and Placing and Open Offer. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

This summary should be read in conjunction with the full text of the announcement.

  PROPOSED FIRM PLACING AND PLACING AND OPEN OFFER

                 1.  Introduction

The Company today announces a share issue to raise gross proceeds of £80.7 million (approximately £76.5 million net of expenses) by the issue of 201,856,192 New Ordinary Shares through the Firm Placing and Placing and Open Offer at 40 pence per New Ordinary Share (the 'Issue Price'). Numis and KBC Peel Hunt have agreed to fully underwrite the Firm Placing and Placing and Open Offer.

The Issue Price represents a discount of 19% to the Closing Price of 49.5 pence per Existing Share on 25 June 2009 (being the last Business Day prior to this announcement).

Tony Bramall, who holds 40,443,776 Shares representing 22.26% of the Company's current issued share capital, has irrevocably undertaken to take up his Open Offer Entitlement in respect of 33,703,146 Open Offer Shares and a participation in the Firm Placing of 22.26% of the Firm Placing. Trefick Limited, which holds 38,711,800 shares representing 21.31% of the Company's current issued share capital, has irrevocably undertaken to take up its Open Offer Entitlement in respect of 32,259,833 Open Offer Shares and a participation of 21.31% of the Firm Placing.

Pursuant to the Placing Agreement, Numis and KBC Peel Hunt have agreed to procure Conditional Placees for the Open Offer Shares at the Issue Price, subject to clawback to satisfy valid applications from Qualifying Shareholders under the Open Offer, failing which Numis and KBC Peel Hunt will, as principal, subscribe for such Open Offer Shares.  

The Firm Placing and Placing and Open Offer are conditional upon, amongst other things, the approval by the Shareholders of the Special Resolution at the General Meeting and upon the Placing Agreement becoming unconditional in all respects, save for Admission.

The Company announced on 29 May 2009 that it had secured the Banking Facility Agreement in respect of its existing borrowings until 2012. The Company has since entered into the Amended Banking Facility Agreement which is conditional upon the completion of the Firm Placing and Placing and Open Offer and prepayment of the £50 million Facility B and £15 million of term loan facility A, plus accrued interest due under the existing Banking Facility Agreement which will only occur if Shareholders approve the Special Resolution to enable the Firm Placing and Placing and Open Offer to proceed.

2.  Background to and reasons for the Firm Placing and Placing and Open Offer and use of proceeds

The Board recently entered into the Banking Facility Agreement with its lending banks providing for facilities of up to £210 million to be made available to the Company until April 2012. The Board is confident that the Banking Facility Agreement provides a sound financing structure for the Company in the medium term with sufficient covenant headroom and flexibility going forward. Covenant levels and facility headroom have been agreed at levels which provide sufficient working capital and financial flexibility to the Group, even if the Group's trading was to deteriorate to a level below the Board's expectations and the proposed Firm Placing and Placing and Open Offer were not to proceed.

In its negotiation of the Banking Facility Agreement, the Board has been conscious of the increasingly difficult borrowing environment created by the global economic downturn and liquidity constraints in debt markets and, as expected, the terms negotiated under the Banking Facility Agreement are more expensive than those of the Group's previous facilities. Recognising this, the Board has considered the use of alternative sources of capital in order to enhance the Company's capital structure and minimise the additional cost of bank borrowings. As a result of these considerations, the Board proposes to raise gross proceeds of £80.7 million through the Firm Placing and Placing and Open Offer.

The Board intends to use the net proceeds of the Firm Placing and Placing and Open Offer, amounting to approximately £76.5 million, to reduce the Group's borrowings under the Banking Facility Agreement. The Company will repay the entire high interest sterling term loan B ('Facility B') in the amount of £50 million together with all accrued interest due thereon, repay £15 million of the sterling term loan A ('Facility A') and also pay £11.5 million into the multi-currency revolving credit facility ('Facility C'). The £11.5 million paid into Facility C under the Banking Facility Agreement will remain available for future withdrawal.

Applying the Net Proceeds in this way, the successful completion of Firm Placing and Placing and Open Offer will result in the Group significantly lowering its gearing and therefore improving its credit worthiness. On the basis of the resulting improved capital structure and significant reduction in borrowings, the Board has negotiated, and entered into, amendments to the existing debt terms in the Banking Facility Agreement which are conditional on the Firm Placing and Placing and Open Offer proceeding. The amended terms which are contained in the Amended Banking Facility Agreement include margin, fees, covenant levels and restraints on the payment of dividends, the key aspects of which are summarised in the table below. These amendments further reduce the cost of the remaining borrowings drawn under the facilities, remove the requirement for the Company to appoint a special adviser to assist the Company in improving its capital structure and also remove certain commercial restrictions contained in the Banking Facility Agreement. If the Firm Placing and Placing and Open Offer is approved and completed, the Board would expect the Group's overall borrowing costs to be approximately £16.7 million lower than they would have been under the existing Banking Facility Agreement for the period from 1 July 2009 to 31 December 2011. 

The Board has today signed the Amended Banking Facility Agreement containing the modified terms referred to above, which are conditional on the Special Resolution being approved, prepayment of the £50 million Facility B and £15 million of term loan facility A under the existing Banking Facility Agreement and Admission taking place.

The Group's balance sheet will be strengthened significantly as a result of the Firm Placing and Placing and Open Offer which should assist the refinancing the Group's debt facilities on more beneficial terms ahead of their maturity in 2012. The improved capital structure will also provide significantly increased flexibility to enable the Company to pursue its development strategy as set out in section 4.3 below.

In addition to the above, the current dividend restrictions in the Banking Facility Agreement will be relaxed under the Amended Banking Facility Agreement following completion of the Firm Placing and Placing and Open Offer which, it is envisaged, will allow an earlier return to a progressive dividend policy.  

The Board anticipates that subject to the successful completion of the Firm Placing and Placing and Open Offer and the Amended Banking Facility Agreement becoming effective, the Company may be able to pay dividends in 2010, subject to the financial performance of the Company in the relevant period. Further details of the Company's dividend policy are included in section 6 below.

2.1  Summary of the amendments to the banking terms

	Banking Facility Agreement	Amended Banking Facility Agreement
Facilities
Facility A: £107 million term loan	No initial repayment	£15.0 million repaid
	Margin of  LIBOR + 4% p.a.	Margin of  LIBOR + 3-4% p.a.
Facility B: £50 million loan	Margin of  LIBOR + 10% p.a.	Fully repaid
Facility C: £53 million revolving credit facility	No initial repayment	£11.5 million repaid
	Margin of  LIBOR + 4% p.a.	Margin of  LIBOR + 3-4% p.a.
Covenants
Interest Cover (period start to period end)	1.8:1 to 2.1:1	1.8:1 to 2.7:1
Average Bank Debt Leverage (period start to period end)	4.7:1 to 3.3:1	4.7:1 to 1.5:1
Average Total Debt Leverage (period start to period end)	7.1:1 to 5.3:1	6.9:1 to 3.4:1
Cashflow Cover (period start to period end)	0.6:1 to 1:1	0.7:1 to 1:1
Details of the covenant ratios at the relevant test dates are set out in Annex II.
Fees
Anniversary fee	0.75% p.a. of total facilities	Fee payable if the leverage ratio is more than 2:1 on 30 June in any year.

It is the Board's opinion that it is in the Shareholders' interests to secure the beneficial banking terms offered through the Amended Banking Facility Agreement. The Firm Placing and Placing and Open Offer will enable the Company to raise the funds to prepay the £50 million Facility B under the existing Banking Facility Agreement and £15 million in relation to Facility A, thereby enabling the Amended Banking Facility Agreement to become unconditional.

Further details of the Banking Facility Agreement and the Amended Banking Facility Agreement are set out in Annex II.

             3.  2008 financial results

On 29 May 2009 the Company announced its audited consolidated financial statements for the year ended 31 December 2008.

           4.  Current trading and prospects

Lookers is one of the UK's leading motor retail and distribution groups, operating both a franchised business of 121 motor retail outlets across 33 marques from 79 locations across the UK. Its independent aftermarket parts division has three elements; FPS operates from 19 regional depots supported by a distribution centre in Sheffield, BTN Turbo operates from Uxbridge, and APEC operates from Bristol.

           4.1  UK motor market

The UK motor sector has experienced difficult trading during the last twelve months. The global economic downturn, uncertainties in financial markets and rising unemployment have affected UK consumer confidence. A reduction in consumer credit to finance car purchases has compounded this drop in consumer confidence.

There was a sharp reduction in new car volumes in 2008, in particular in the second half of the year. New car registrations in the second half of 2008 were down by 22% (source: SMMT) compared to the same period in 2007, and down in the five months to the end of May 2009 by 28% when compared with the same period in 2008 (source: SMMT). Used car volumes were more resilient, but suffered significant falls in value in the second half of 2008 (source: CAP/Glasses Guide), although the Company has seen an encouraging improvement in 2009.  The Board has witnessed growth in dealership aftersales performance in 2008, the fall in the number of vehicles aged up to three years in the UK, being offset by dealership consolidation. The four year plus vehicle parc in the UK has grown in 2008 and 2009 providing a strong platform for growth for the Group's independent parts business that supplies to the independent motor sector.  Forecasts for the UK new car market in 2009 is rising from original estimates of 1.6 million following the introduction of the Government's scrappage scheme (detailed below) for vehicles over 10 years old. The used car market remains resilient, the sector benefiting from rising values in 2009 (source: Glass/CAP).

In April 2009 the UK Government's £300 million vehicle scrappage scheme was announced. The scheme has been designed to support the UK automotive industry by stimulating demand for new vehicles. Under the scheme, the UK Government offers a £1,000 incentive, matched by participating vehicle manufacturers, towards the cost of a new vehicle for consumers trading-in a car or light commercial vehicle over ten years old. The scheme started on 18 May 2009 and will end in March 2010, or when the £300 million funding has been exhausted, if earlier. The Board believes that similar car scrappage programmes in other European markets including Germany, France and to a certain extent Italy have proved to be successful and believes that the UK scheme should improve new car registrations and thereby help strengthen the Company's new car retail sales.

4.2  Current trading and outlook

Motor division

The Company delivered a resilient performance in 2008, given the unprecedented decline in new car sales volumes and used car values. In 2008, the Company acted quickly to close loss making dealerships and to consolidate market area representation where appropriate. These actions have streamlined and strengthened the dealership portfolio. The Company also reduced headcount in retained operations by 6% and reduced stock inventories by £35 million. These actions, which have been completed, have generated £12 million of annualised recurring cost savings and the Group will continue to focus on managing costs and take measures where appropriate with the aim of reducing the Group's annualised cost base further.

The Group's like for like new car sales for the first five months of 2009 are 10% ahead of the market and the motor division's performance in the period is ahead of budget, despite market pressures affecting sales of new cars.

Motor division - New cars

The market for new cars remains extremely challenging, and yet the Group is performing ahead of the overall UK market decline of 28% (source: SMMT)  in the five months to 31 May 2009, and is therefore gaining market share. Nevertheless, the decline in volume has reduced profits compared to the same period in 2008.

The Company has seen an increase in enquiries regarding the UK Government's vehicle scrappage scheme and believes that this will strengthen volume in the small / lower medium segments of the new car market. 

Motor division - Used cars

In 2008, Lookers outperformed the UK used car market which fell by 4.4% in 2008, compared to 2007 (source: SMMT) with Group volumes up 8.2% in 2008 trading.

Following the reduction in the value of used cars in the UK market in the second half of 2008, used car values and volumes have recovered in the first five months of 2009, with volumes up by 11% compared to the same period in 2008.

Motor division - Aftersales

The motor division service and parts business delivered healthy growth in 2008 showing a 3% increase in revenue and a 7% increase in gross profit when compared to 2007, which the Board believes is partly as a result of consumers seeking to repair and maintain rather than replace their vehicle, combined with robust customer relationship marketing programmes.

The aftersales business through the Group's dealerships continues to grow in 2009, with revenues and margins above 2008 levels and the Group's share of the aftermarket continues to increase.

Independent Parts division

The Company's independent parts distribution business has continued to perform well, having a record 2008 with a 10% increase in revenues, at the end of the year as compared with the end of 2007, and delivering further growth in 2009. FPS is an independent same day distributor of branded hard automotive parts, APEC distributes aftermarket dry brake parts, and BTN is an aftermarket distributor of turbo chargers worldwide.

The independent parts division has made a strong start to the 2009 financial year and this area of its business continues to benefit as the slower demand for new cars translates into a greater need by consumers for car repairs to their current vehicle as they choose to maintain rather than exchange that vehicle for a new vehicle. Expansion of the FPS Sheffield Distribution Centre and three key depots provides the platform for continuing growth through product range development in 2009 and beyond.

4.3  Group strategy

The Group has established a solid basis for protecting profitability in the current difficult trading environment. The Board considers the proposed reduction in current borrowing levels following the successful completion of the Firm Placing and Placing and Open Offer to be a key element of its strategy which will provide greater flexibility to capitalise on opportunities as the market recovers. In the medium to long term and as a result of the increased financial flexibility which will follow from the successful completion of the Firm Placing and Placing and Open Offer, the Company will be in a strong position to consider targeted acquisitions in order to continue to diversify its business. The Group's development strategy is to further strengthen its independent parts business and further diversify the range of manufacturers it represents adding other car and commercial vehicle brands, whilst streamlining its current portfolio.

         4.4  Property

The Group is backed by a freehold and long leasehold property portfolio with a net book value of £186.2 million as at 31 December 2008. The freehold and leasehold properties owned by the Group at 31 December 2003 were revalued at that date by independent qualified valuers. Subsequent additions are included at cost.

Properties	2008 £m		2007 £m
Freehold	132.7		135.5
Long leasehold	48.1		49.7
Assets for sale	5.4		-
Total	186.2		185.2
Total property value per share	£1.03		£1.02

The Board believes that the mix of freehold and leasehold properties in the Group's portfolio provides significant flexibility in terms of the Group's ability to refocus its operations. 

4.5  Brand partners

The Board notes the current financial difficulties being experienced by General Motors Corporation, the parent company of GM Europe, which owns the Vauxhall marque in the UK. It is too early to gauge the potential implications for Vauxhall's UK sales, if any. Sales of Vauxhall cars represent 23% of Lookers' new car sales and approximately 16% of motor EBIT in the first four months of 2009. The Board is encouraged by media reports that negotiations regarding the restructuring and acquisition of the relevant divisions of GM Europe are well progressed and continues to monitor the situation.

            4.6  Summary

The Board believes that fragile consumer confidence will mean that 2009 will be challenging for the new car market. However, the impact of the recently announced UK scrappage scheme, a scheme which has proved to be highly successful in other European countries, should ultimately benefit new car sales, and the Board is endeavouring to optimise the opportunity that this presents to maximise sales. 

The Board further believes that the Group's diversified business model and market-leading aftersales offering, coupled with the actions it has completed across its franchise operations to reduce costs, resulting in the realisation of £12 million of cost savings in the current financial year, have positioned the Group such that it is well placed to take advantage of opportunities which may arise and emerge from the current downturn as a stronger and more efficient business. 

5.  Use of proceeds

The Board intends to use the Net Proceeds of the Firm Placing and Placing and Open Offer, amounting to approximately £76.5 million, to reduce the Group's bank borrowings. The Company will repay the high interest £50 million Facility B loan, repay £15 million of the term loan and place the remaining £11.5 million into the revolving credit facility which will provide the Group with greater flexibility.

            6.  Dividend policy 

In light of prevailing economic conditions, the Company announced on 19 December 2008 that it did not intend to pay a final dividend for the year ended 31 December 2008. Pursuant to the terms of the Amended Banking Facility Agreement, the Group is prevented from paying any dividends before the accounts for the period to 30 June 2010 are delivered. It is the Board's current intention to return to a progressive dividend policy in 2010, within the restrictions placed upon the Group by the terms of the Amended Banking Facility Agreement and subject to trading.

7.  Details of the Firm Placing and Placing and Open Offer

7.1  Structure

The Firm Placing and Placing and Open Offer, which are fully underwritten, will be made on the terms and subject to the conditions to be set out in the Prospectus.

The Company intends that 50,464,048 New Ordinary Shares will be issued through the Firm Placing and 151,392,144 New Ordinary Shares will be issued through the Placing and Open Offer at 40 pence per New Ordinary Share (to raise gross proceeds of £80.7 million). The Issue Price represents a discount of 19% to the Closing Price of 49.5 pence per Existing Share on 25 June 2009 (being the last Business Day prior to this announcement).

The Directors recognise the importance of pre-emption rights to Shareholders and consequently all the Open Offer Shares proposed to be placed are subject to clawback to satisfy valid acceptances of their Open Offer Entitlements from Qualifying Shareholders under the terms of the Open Offer. The Open Offer therefore provides an opportunity for all Qualifying Shareholders to participate in the fundraising by subscribing for their respective Basic Entitlements.  

            7.2  Firm Placing

The Firm Placees required the Firm Placing in order to give them certainty as to the size of their shareholding following the fundraising. The Firm Placees have agreed to subscribe for 50,464,048 New Ordinary Shares at the Issue Price (representing gross proceeds of £20.2 million). The Firm Placed Shares are not subject to clawback and are not part of the Placing and Open Offer.

The Company's largest shareholders, Tony Bramall and Trefick Limited, have undertaken to participate in the Firm Placing and, as Conditional Placees of Shares, subject to clawback under the Open Offer, to take up their entitlements under the Open Offer with the intent that they shall retain their current respective percentage holdings in the Company. As each of Tony Bramall and Trefick Limited are separately deemed to be related parties to the Company for the purpose of the Listing Rules, their participation as Placees in the Firm Placing and the Conditional Placing requires the approval of independent Shareholders at the General Meeting.

            7.3  Conditionality

The Firm Placing and Placing and Open Offer are conditional upon the following:

●    the passing without amendment of the Special Resolution;

●    Admission becoming effective by not later than 8.00 a.m. on 31 July 2009 (or such later time and date as the Sponsors and the Company may agree); and

●    the Placing Agreement otherwise having become unconditional in all respects and not having been terminated in accordance with its terms prior to Admission.

If the Special Resolution is not passed or Admission does not take place by 8.00 a.m. on 31 July 2009 (or such later time as the Company may determine, not being later than 8.00 a.m. on 7 August 2009), the Firm Placing and Placing and Open Offer will lapse, any Open Offer Entitlements admitted to CREST will, after that time and date be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

             7.4  Application for Admission

Application will be made to the UK Listing Authority for the New Ordinary Shares to be listed on the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. 

The New Ordinary Shares to be issued pursuant to the Placing and Open Offer will, following Admission, rank pari passu in all respects with the Shares in issue at the date of this announcement and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Shares after Admission.

The Company has arranged for the Firm Placing and Placing and Open Offer to be fully underwritten by Numis and KBC Peel Hunt to provide certainty as to the amount of capital to be raised. Numis is acting as sole bookrunner and lead underwriter and joint broker to the Company in relation to the Firm Placing and Placing and Open Offer.  KBC Peel Hunt is acting as joint underwriter and joint broker to the Company in relation to the Firm Placing and Placing and Open Offer.

         8.  Effect of the Firm Placing and Placing and Open Offer

Upon completion of the Firm Placing and Placing and Open Offer, the New Ordinary Shares will represent 52.6% of the Enlarged Issued Share Capital. New Ordinary Shares issued through the Placing and Open Offer will represent 39.5% of the Enlarged Issued Share Capital. The New Ordinary Shares will be issued pursuant to authorities to be sought at the General Meeting. Following the issue of the New Ordinary Shares pursuant to the Placing and Open Offer, a Qualifying Shareholder who does not take up any of their Open Offer Entitlement will suffer a dilution of 52.6% to his economic interests in the Company. A Qualifying Shareholder subscribing for his Open Offer Entitlement in full will suffer a dilution of 13.2% to his economic interests in the Company.

The Firm Placing and Placing and Open Offer will result in a decrease in borrowings of £76.5 million.

The Directors expect that the proceeds of the Firm Placing and Placing and Open Offer will make a positive contribution to total earnings in the financial year ending on 31 December 2009 as a result of lower interest payments arising from reduced levels of net financial indebtedness and reduced margin due to the structure of the Banking Facility Agreement. However, even after this saving on interest expense, the Directors expect that the increased number of Ordinary Shares in issue following the Firm Placing and Placing and Open Offer is expected to have a negative effect on Lookers' reported earnings per share for the year ending 31 December 2010. These statements do not constitute a profit forecast and should not be interpreted to mean that the earnings per share in any financial period will necessarily be lesser or greater than those for the relevant preceding period.

           9.  Summary financial information

The following summary consolidated financial information on the Group for each of the three years ended 31 December 2008, 2007 and 2006 has been prepared in accordance with IFRS.

Summary consolidated income statement

	2008 £million (audited)	2007 £million (audited)		2006 £million (audited)
Revenue	1,775.9	1,680.0	1,426.7
Profit from operations before amortisation and exceptional items	33.9	40.0	36.6
Profit from operations before depreciation, amortisation and exceptional items	42.9	47.7	42.4
Profit from operations	10.2	38.3	31.7
(Loss)/profit on ordinary activities before taxation	(14.9)	23.3	21.4
(Loss)/profit for the year	(16.0)	16.4	14.6
Basic (loss)/earnings per ordinary share	(8.82)p	9.09p	8.13p
Diluted (loss)/earnings per ordinary share	(8.82)p	9.05p	8.09p

Summary consolidated balance sheet
	2008 £million (audited)	2007 £million (audited)		2006 £million (audited)
Non-current assets	269.0	272.6	205.5
Current assets	395.8	439.7	343.4
Total assets	664.8	712.3	548.9
Current liabilities	393.2	433.0	347.6
Net current assets	2.6	6.7	(4.2)
Non-current liabilities	188.7	167.8	97.0
Total liabilities	581.9	600.8	444.6
Net assets	82.9	111.5	104.3
Total equity	82.9	111.5	104.3

Summary consolidated cash flows

	2008 £million (audited)	2007 £million (audited)		2006 £million (audited)
Cash and cash equivalents at the beginning of the year	14.8	2.1	(0.9)
Net cash inflow/(outflow) from operating activities	1.6	43.6	39.4
Net cash (used)/generated by investing activities	(16.3)	81.7	(45.1)
Net cash from financing activities	2.0	50.8	8.7
(Decrease)/increase in cash and cash equivalents	(12.7)	12.7	3.0
Cash and cash equivalents at 31 December	2.1	14.8	2.1

           10. Board Changes

It will be announced at today's AGM that Ken Surgenor, who will be 65 in August, is standing down from the Board and from his position as Chief Executive as at 30 September 2009. Peter Jones, currently Managing Director of the Motor Division, will be appointed to the position of Chief Executive on 1 October 2009. Ken Surgenor will remain with the Group after 30 September 2009, running the Charles Hurst group of businesses in Northern Ireland.

           11.  Further information and risk factors 

Your attention is drawn to the further information set out in the annexes to this announcement, in particular Annex I headed 'Risk Factors'.

            12.  Intentions of Directors

Each of the Directors is supportive of the fundraising and the Board will subscribe, in aggregate, for 37,875,853 New Ordinary Shares, a figure in excess of their aggregate Open Offer Entitlements.

Following the Firm Placing and Placing and Open Offer, the Directors will beneficially own, in aggregate, up to approximately 24.1% of the Enlarged Issued Share Capital.

            13.  Effect of Fundraising not completing

The Placing and Open Offer is a significant part of the Board's proposal to optimise the Company's capital structure and minimise the additional cost of bank borrowings. The Board believes it is important that Shareholders vote in favour of the Resolutions. If the Special Resolution is not passed at the General Meeting or if Admission does not take place, the Firm Placing and Placing and Open Offer will not proceed and the Net Proceeds will not be received by the Company. The consequences of this would be that the Amended Banking Facility Agreement would lapse and not come into effect, resulting in the continuation of (i) the higher debt financing costs, (ii) the requirement to appoint an adviser in relation to capital structure to the Board to support the Company in seeking to reduce its borrowings in line with the Board's strategy in agreement with its lending banks, and (iii) commercial restrictions on the operation of the Company as contained in the Banking Facility Agreement, resulting in a longer period until a return to a progressive dividend policy, and flexibility to pursue the Group's growth strategy.

  ANNEX 1

RISK FACTORS

Any investment in the Shares is subject to a number of risks. Accordingly, prior to making any investment decision, prospective investors should carefully consider all the information contained in this announcement and all of the information incorporated by reference into this announcement including, in particular, the risk factors described below. Some of the following factors relate principally to the Group's business, the sector in which it operates, the laws and regulations that it is or may become subject to or affected by, and to the Firm Placing and Placing and Open Offer. Other factors relate principally to an investment in the New Ordinary Shares.

The Board considers the following risks and other factors to be material for potential investors in the Company but the risks and uncertainties described, are not set out in order of priority and are not the only ones that may face the Group. Additional risks and uncertainties not currently known to the Group, or that the Group currently deems immaterial, may also have an adverse effect on the Group's business, results of operations, financial condition or prospects. In such a case, the market price of the Shares could decline and investors may lose all or part of their investment. Shareholders and prospective investors should read this section in conjunction with this entire document.

1.    Risks relating to market and general economic conditions

The UK motor industry is currently undergoing a significant downturn in new car sales volumes which has a negative impact on the Group's performance.

Over the past twelve months, the global vehicle industry has suffered an unprecedented and rapid downturn which accelerated sharply in the UK in the second half of 2008, continuing in 2009. New car sales volumes in the UK fell 11% in 2008 and 22% in the half year to December 2008 against the equivalent period in 2007 (source: SMMT). New car registrations for the period January to May 2009 were down 28% (source: SMMT). This downturn could continue for an indefinite period of time with material uncertainty as to when markets will recover. The resulting deterioration in confidence could further decrease demand for new vehicles and this downturn could continue to have a material effect on the Group's business, results of operations, financial condition or prospects.

The new vehicle market has been adversely affected and could continue to be adversely affected by conditions in the global financial markets.

The new vehicle market is influenced by general economic conditions, including changes in consumer confidence, indirect taxation, fuel prices, consumer spending and preferences (including customers choosing alternative forms of transport), interest rates, unemployment rates, government transport policy and the cost and availability of credit. Additionally, the demand for new vehicles is cyclical, which in some years will lead to reduced margins caused by oversupply. During economic downturns such as the one the motor industry is currently experiencing, new vehicle sales to customers have declined due to weak demand, and a number of other factors including the significant increase in the price of oil during 2008, the potential impact of environmental regulation, the cost of road fund licenses on less fuel efficient, higher emission vehicles and the effects of a decline in residual values inflating the overall cost of vehicle ownership. Currently, the UK market is experiencing problems caused by a combination of these factors. Despite lower interest rates, the lack of available credit, together with a general feeling of uncertainty in the economy has resulted in a significant fall in new car registrations. Further, while consumer demand for used cars and aftersales (repairs, servicing and parts) is generally considered to be less prone to cyclicality than the demand for new vehicles, as customers substitute new car purchases for nearly new or used cars, or spend more money keeping their existing vehicles roadworthy, a further worsening in general economic conditions may also reduce demand for used car and aftersales services and such a reduction could have a material effect on the Group's business, results of operations, financial condition or prospects.

The motor industry has been and could continue to be adversely affected by the conditions in the global credit markets.

The recent turmoil in the financial markets has also resulted in tighter credit conditions. In the vehicle finance market, tight credit conditions can result in a decrease in the availability of loans and leases, more stringent lending restrictions, and higher costs of credit for both the Group and potential purchasers of vehicles. This could have an adverse effect on the Group's new and used vehicle sales and profit margins. The Group anticipates that this effect will continue, and the availability of motor loans and leases could be restricted throughout 2009, and possibly beyond until such time as the financial and credit markets recover. The Group also relies on financing to carry on its business generally, and in particular to purchase and stock vehicle inventory. Any inability to obtain financing on commercially acceptable terms, or any increase in borrowing costs, could have a material effect on the Group's business, results of operations, financial condition or prospects.

Changes in interest rates, and LIBOR in particular could adversely affect the Group's debt service costs. 

The Group's borrowing facilities, and the rates of interest which are payable on the amounts the Group has borrowed, are linked to LIBOR. Changes in interest rates and/or LIBOR could therefore adversely affect the Group's debt service costs. An increase in interest rates and/or LIBOR would increase debt service costs and would adversely affect the Group's cash flow. Increased interest rates could impact on the Group's ability to comply with the covenants in its credit facilities and other borrowing arrangements in the longer term.  

Failure to comply with the covenants in the Group's banking facilities and borrowing arrangements in the longer term could have a material effect on the Group's business and financial condition.

Whilst the Group is currently operating within its banking covenants, a failure by the Group to comply with any of its financial covenants, in the longer term, could result in an acceleration of the Group's obligation to repay its borrowings before the expiry date of the Group's principal banking facilities, which is April 2012. If such failure occurred, the lending banks would also be able to enforce their security and take control of some of the Group's assets and make a demand on any guarantees given in respect of the facilities. The Group cannot give any assurance that it would be able to refinance any such borrowings on commercially reasonable terms, or at all, in the longer term. The failure by the Company to comply with all of its financial covenants and/or its inability to refinance its borrowings in the longer term could have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

Lack of funds available to the Group on acceptable terms could affect the Group's ability to develop its business.

The Group's ability to grow its business is dependent, in part, on its banking and stock financing facilities. The Group is reliant upon stock financing facilities to purchase and stock vehicle inventory. Recent challenging financial market conditions have led to a reduction in the availability of bank lending and the costs of most types of lending have significantly increased. The Group may find it more difficult to obtain stock financing on commercially acceptable terms in the longer term. 

A decline in consumer demand for servicing, repairs and vehicle renewals could have a material adverse impact on the motor industry.

As motor vehicles are built to higher standards and specifications and become technologically more advanced, they may require less frequent servicing and repairs and may be subject to fewer breakdowns and require less frequent renewals. The Group has a large car sales, aftersales and an independent parts distribution business. Any decline in servicing and aftersales requirements may have a material effect on the Group's business, results of operations, financial condition or prospects.

2.    Risks relating to Lookers' business

The motor industry is very fragmented and the Group may be unable to maintain its market share.

The motor vehicle distribution market is highly competitive and comprises a small number of large dealer groups (similar to that operated by Lookers) and a large number of smaller franchise operators, independent used car retailers and, in addition, the market includes internet-based dealers. The Group's franchised businesses also compete in the aftersales market which comprises similar franchised businesses, fast fit chains and a large number of small independent garages and bodyshops. The market therefore offers customers different options depending upon the price and quality of service. Owners of new and nearly new vehicles tend to use franchised businesses and owners of older vehicles tending towards the smaller independent providers.

The Group's franchised businesses rely on the quality of their customer service with an ability to adjust pricing to enable them to react to local competitive conditions. The parts distribution business also operates in a very competitive market place, dominated by a few large operators. The Group's competitors may be able to respond more effectively at a local and national level to market downturns and may be better positioned to take advantage of rationalisation or consolidation opportunities in the industry, or of improvements in the markets, which may impact upon the position the Group holds in the markets in which it operates. This could have a material effect on the Group's business, results of operations, financial condition or prospects. 

Increased operating expenses may adversely affect the Group's earnings.

The Group's operating and other expenses could increase without a corresponding increase in turnover, or reimbursement of operating and other costs. Factors which could increase these costs include:

• increases in the rate of inflation;

• increases in energy costs;

• increases in taxes and other statutory charges;

• changes in laws, regulations or government policies which increase the costs of compliance; and

• increases in insurance premiums.

Increased operating expenses as a result of any or all of these impacting factors could have an adverse effect on the Group's business, results of operations, financial condition or prospects.

The Group may be required to increase its contributions to meet shortfalls in its defined benefit pension scheme.

The Group operates two defined benefit pension schemes for its current and former employees.

As at 31 December 2008 the combined deficit of these two defined benefit pension schemes was £27.7 million (in accordance with the actuarial method and assumptions specified in the Group's audited accounts). The Group continues to look at its options with respect to those schemes to reduce both its costs and exposure.

The Group may be required to increase its contributions to the schemes if: (a) the market value of the assets in the schemes declines; (b) the value of the liabilities increases; (c) there are changes in the investment strategy of the pension schemes; (d) the trustees of the pension schemes take a more prudent approach to deficit recovery payments; (e) a statutory debt obligation under s75 of the Pensions Act 1995 becomes payable (on a buy-out basis), for example on the termination of a pension scheme; or (f) the Pensions Regulator uses his powers to issue a contribution notice or financial support direction.

Whilst the Group is currently able to fund the schemes over the next 12 months, any obligation on the Group to increase its contributions to either or both schemes could have an adverse effect on the Group's business, results of operations, financial condition or prospects.

Failure to recruit, retain or train skilled personnel at all levels of the business may adversely affect the Group's operating and financial results.

The Group is dependent on members of its senior management team and skilled personnel at all levels and believes that its future financial success and ability to meet its financial objectives will depend, in part, on its ability to retain highly skilled management and personnel. The Group is also dependent on the implementation of adequate succession planning procedures in respect of key roles, to ensure continuity. If the Group does not succeed in retaining skilled personnel, it may not be able to grow its business as anticipated or meet its financial objectives. Further, the departure from the Group of any of the Executive Directors or certain senior employees could, in the short-term, have an adverse effect on the Group's business, results of operations, financial condition or prospects. The Board cannot give any assurances that they, or any of the members of the senior management, will remain with the Group.

The Group's business, the quality of its services and therefore its financial success is dependent, in part, on the quality of its personnel. Failure to maintain the skills of its staff may have an adverse effect on the Group's business, results of operations, financial condition or prospects. 

Customer dissatisfaction and other factors may affect the Group's reputation.

Failure to deliver on customer service level expectations could adversely affect the Group's reputation and/or expose the Group to financial liability. The Group's reputation is key to attracting new business and manufacturing partners and new employees. A deterioration of the Group's reputation could, therefore, have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

Non compliance with environmental regulations may result in claims and liabilities which could be substantial.

The Group is subject to extensive and complex laws, regulations, policies and standards, including those that relate to the operation and removal of storage tanks and the use and storage and disposal of hazardous substances. The Group's retail and distribution centres and service, repair, parts and bodyshop centres use and store hazardous materials. Any non-compliance with these regulations could result in significant fines and penalties. Further investigation or remediation may be necessary in the event of leaks or discharges of hazardous substances or other such environmental incidents. Such investigation or remediation could give rise to unexpected liabilities and costs and have a material effect on the Group's business, results of operations, financial condition or prospects.

A major health and safety incident could expose the Group to liabilities and reputational damage.

Operating in the motor industry poses certain inherent heath and safety risks, in particular in relation to service, repair, parts and bodyshop operations. A major health and safety incident may result in penalties for non-compliance with relevant statutory requirements and is likely to be costly in the event that liability is incurred. Furthermore, such a failure could generate significant adverse publicity and have a negative impact on the Group's reputation, which, in turn, may materially affect the Group's businesses, results of operations, financial condition or prospects. Violation of such laws could result in restrictions on the operations of the Group's sites, damages, fines or other sanctions and increased costs of compliance together with potential reputational damage. Any or all of such factors could have a material effect on the Group's business, results of operations, financial condition or prospects.

The terms of the Group's insurance cover may be subject to unfavourable changes. 

The Board believes that the Group has insured its assets and properties adequately and appropriately based on the risks associated with the Group's business and on industry practice. However, the Group cannot guarantee that it will be able to obtain such insurance on comparable terms in the future and this may have an adverse effect on the Group's business, results of operations, financial condition or prospects. For example, there is no guarantee that such insurance will continue to be available, the costs of such insurance may increase and/or the extent of the Group's coverage may reduce. Any such changes to the Group's current insurance cover could have a material affect on the Group's business, results of operations, financial condition or prospects.

3.    Risks relating to legislative, regulatory and taxation matters

Changes to the European Commission Motor Vehicle Block Exemption (Commission Regulation (EC) No 1400/2002) (the 'MVBER') could have a material adverse impact on the performance of the Group's business

The MVBER is a complex set of rules applying to vertical supply arrangements concluded in the motor vehicle sector relating to the supply of new vehicles, spare parts and repair and maintenance services within the European Community ('EC'). It ensures that those arrangements falling within its scope are not in breach of EC or national competition laws (which would render them void and unenforceable in whole or part), with the overall aim of enhancing competition in motor vehicle distribution relative to the sale of new vehicles and also between providers of maintenance and repair services, thereby increasing consumer choice.

The MVBER is due to expire on 21 May 2010 and the European Commission (the 'Commission') is currently considering whether to allow it to expire or to renew it in either the same, or on amended, terms.

If the MVBER is left to expire it is likely that the more general and less stringent Vertical Agreements Block Exemption (Commission Regulation (EC) No 2790/1999) will apply to vertical arrangements in the motor vehicle sector, although this exemption is also due to expire on 31 May 2010 and may not continue in its current form. There is therefore general uncertainty within the industry as to what the effect of the expiry of either or both of these regulations might be. Potential adverse effects could include:

(a)    giving manufacturing partners the ability to limit dealers sales of competing brands to twenty per cent.; and

(b)    compromising the independence of dealers by, for example, manufacturing partners setting minimum terms of contractual notice and restricting the transfer of dealerships between dealers.

Although the Board cannot predict with any degree of certainty what effects the expiry, or amendment of the MVBER might have on the Group's business, expiry of and/or changes to the MVBER may have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

Legislative or regulatory changes could have a material effect on the Group's business, results of operations, financial condition or prospects.

The Group is subject to laws, regulations and policies all of which are subject to change. Areas where changes could have an adverse impact on the Group's performance include, but are not limited to:

• general changes in government transport or regulatory policies (for example, changes to the road fund licence or fuel duty) which could significantly influence customer decisions or preferences in the motor sector. In the UK, changes to the road fund licence and an increase in fuel duty in 2008 had an adverse effect on the sales of new and used 4 wheel drive vehicles and the value of such vehicles;

• changes in environmental legislation, including the proposed EU regulations to set stricter carbon dioxide emission performance standards for new passenger cars; and

• external bodies applying or interpreting standards or laws in a way which differs from the way in which the Group has historically applied or interpreted them.

Changes to taxation legislation or changes in available reliefs may adversely affect the Group's financial results and performance.

Tax rules and/or their interpretation may change. Any change in taxation legislation or regulation and/or their interpretation could affect the value of the Group's assets, the Group's ability to provide returns to Shareholders or otherwise have an adverse effect on the Group's business, results of operations, financial condition or prospects. Further, the Group's current assumptions as to its future performance (these assumptions being based on the current legislative position and any known future changes) may change as a result of changes to any reliefs from taxation that may be available to the Group in the future may not be in accordance with the assumptions made by the Group as to its future performance (these assumptions being based on the current legislative position and any known future changes). If the assumptions made by the Group as to such taxation reliefs available do not prove correct, the Group's ability to provide returns to Shareholders may be affected and there may be an adverse effect on the Group's business, results of operations, financial condition or prospects.

The Group's operations and businesses may be materially affected by import product restrictions and foreign trade risks.

A portion of the Group's new vehicle business involves the sale of vehicles or vehicle parts that are manufactured outside the EU. As a result, the Group's operations are subject to certain risks associated with imported goods, including import duties, differing tax rates and structures, trade restrictions, transportation costs, work stoppages and general political and economic conditions in foreign countries. The governments in the jurisdictions in which the Group sources vehicles or parts from could impose new or adjust existing quotas, duties, tariffs or other restrictions on goods. Any of those impositions or adjustments could materially affect the Group's ability to purchase imported vehicles and parts at reasonable prices. This could have a material adverse effect on the Group's business, results of operations, financial condition and operating results.

4.    Risks relating to business and manufacturing partners and suppliers

Decreased availability or withdrawal of VSF facilities could have a material adverse effect on Group's business.

As is common in the UK motor retail sector, Lookers finances a significant proportion of its working capital requirements using uncommitted VSF facilities secured against vehicle stocks owned by the Group.

VSF facilities are used to finance the majority of the Group's used vehicles. VSF facilities are provided by third party asset backed finance providers and the lenders have the ability to withdraw facilities with 30-90 days' notice. Within the VSF facilities there is a risk that the pricing of these facilities could increase, and that funding parameters and facility limits could be reduced. Certain VSF providers have recently reduced the level of facilities available to Lookers. If any VSF providers were to withdraw their facilities, there is a risk that replacement facilities could be more expensive. If the level of VSF available to Lookers was to be significantly reduced, this would have a serious impact on the liquidity of the Group at short notice and could therefore have a material adverse effect on the business, results of operations, financial condition or prospects of the Group.

The Group's financial condition and results of operations depend on the success, financial strength and support of its business and manufacturing partners and suppliers.

The Group has various arrangements in place with its business and manufacturing partners and suppliers. The Group's overall success is dependant upon the franchise arrangements in place for the portfolio of brands which it retails and distributes and core supplier relationships within its parts division.

The Group depends on its business and manufacturing partners and suppliers to provide it with a supply of new vehicles and parts which meet regulatory requirements, such as the proposed EU legislation to reduce carbon dioxide emissions, and which fulfil consumer demands and satisfy consumer preferences. The Group's profitability may be adversely affected where it cannot obtain an appropriate supply and/or quality of new vehicles or parts to respond to consumer tastes or which comply with regulations in the markets in which it operates. In addition, delays by business and manufacturing partners in the roll-out, supply and delivery of new vehicles or parts could lead to reduced sales which in turn could have a material adverse effect on the Group's business, results of operations, financial condition or prospects. Further, the Group's manufacturing partners use a series of incentive schemes to support new car sales and warranty programmes. Changes to or discontinuation of these schemes or programmes could also affect the Group's business.

The Group's manufacturing partners and suppliers have been and may continue to be adversely affected by economic downturns or recessions, fluctuations in currency exchange rates, significant declines in the sale of new vehicles, increases in interest rates, declines in their credit ratings, labour strikes or similar disruptions, supply shortages, rising material costs, rising employee costs, adverse publicity that may reduce consumer demand for their products, product defects, vehicle recalls, litigation, poor product range or vehicle design, or other adverse events. These and other risks could have a material adverse effect on any business or manufacturing partner or supplier and its ability to supply, design, market, produce or distribute new vehicles and parts, which in turn could have a material adverse effect on the business, results of operations, financial condition or prospects of the Group.

Failure of a manufacturing partner could have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

The Group relies upon its manufacturing partners and suppliers for a significant proportion of its revenue and profits. Due to global economic events, several manufacturers have come under severe financial pressure. General Motors Inc., the manufacturing partner of Vauxhall in the UK, recently filed for Chapter 11 bankruptcy protection in the US which will have implications on General Motors' operations in the UK and Europe. The Group derives a significant proportion of its revenue and income from its franchise agreements with Vauxhall. It is likely that the failure of General Motors' European operations or the acquisition of General Motors' European business by a third party will impact upon the Group.  At the date of this announcement, talks are progressing with a number of third parties regarding the acquisition of General Motors' European business but it is not clear whether the business in its entirety, including Vauxhall, will be acquired, and if so, by which entity. If a new owner is found, the Board cannot predict whether or not the new owner will seek to maintain the existing commercial arrangements which the Group has with regard to its Vauxhall franchises. If the new owner ceases Vauxhall's operations in the UK, and/or seeks to amend the terms upon which the Group operates its Vauxhall franchises, this could have a material adverse effect upon the way in which the Group operates its business and, consequently, upon the Group's current revenue levels. The Group also relies upon other key suppliers and manufacturing partners some of whom are also facing financial pressure. The failure of a manufacturing partner or supplier could have a material adverse effect on the business, results of operations, financial condition or prospects of the Group.

Exchange rate fluctuations may adversely affect the Group's earnings

A large proportion of the Group's manufacturing partners or suppliers source parts or manufacture vehicles overseas. In addition, the Group's independent parts division also sources parts from overseas. The appreciation of the Euro and US Dollar against Sterling in late 2008 and early 2009 has meant that most manufacturing partners and suppliers have had to increase prices. In recent years Sterling had appreciated against most currencies allowing imported vehicles to be priced more competitively. Further appreciation of overseas currencies against Sterling could have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

Reduced availability of credit insurance could materially effect the terms on which the Group contracts with its key suppliers

Some of the Group's suppliers have credit insurance in place to safeguard against customer non-payment. In the current economic climate, credit insurers are becoming increasingly prudent and risk-averse when providing cover. Where the Group's suppliers are unable or unwilling to obtain credit insurance on acceptable terms it is common for them to seek to agree shorter credit periods or discontinue supply which could affect the Group's ability to meet its working capital requirements in the longer term, and have a material adverse effect on the Group's business, results of operations, financial condition or prospects.

5.    Risks relating to the Shares and Firm Placing and Placing and Open Offer

Substantial future sales or issues of Shares could impact on the market price of Shares.

The Board cannot predict what effect, if any, future sales or issues of Shares, or the availability of Shares for future sale, will have on the market price of the Shares. Sales of substantial numbers of Shares in the public market following the Firm Placing and Placing and Open Offer, or the perception or any announcement that such sales could occur, could adversely affect the market price of the Shares and may make it more difficult for Shareholders to sell their Shares at a time and price which they deem appropriate.  The Board currently has no plans to issue any Shares, other than the New Ordinary Shares and Shares issued pursuant to the Lookers Share Schemes during the next 12 months.

Shareholders who do not acquire New Ordinary Shares pursuant to the Placing and Open Offer will experience a dilution of their current ownership in the Company.

Following the issue of the New Ordinary Shares pursuant to the Firm Placing and Placing and Open Offer, Qualifying Shareholders (including Shareholders in any Restricted Jurisdiction and other jurisdictions where participation is restricted for legal, regulatory or other reasons) who do not take up any of their Open Offer Entitlement will suffer a dilution of 52.6% to their respective economic interests in the Company. If Qualifying Shareholders subscribe for their Open Offer Entitlement in full they will suffer a dilution of 13.2% to their economic interests in the Company.

There may be volatility in the value of an investment in the Shares and the market price for the Shares may fluctuate and decline below the Issue Price.

The Issue Price may not be indicative of the market price for the Shares following Admission. Following Admission, the trading price of the Shares may be subject to wide fluctuations in response to a range of events and factors (including those referred to in this section), such as variations in operating results, changes in financial estimates and recommendations by securities analysts, the share price performance of other companies that investors may deem comparable to the Group, the general market perception of automotive retail companies, news reports relating to trends in the Group's markets or the wider economy, legislative changes in the Group's sector and other factors outside of the Group's control. Such events and factors may adversely affect the trading price of the Shares, regardless of the performance of the Group.

Stock markets have from time to time experienced significant price and volume fluctuations that have affected the market prices for securities and any such fluctuation may be unrelated to the Group's operating performance or prospects. Prospective investors should be aware that the value of the Shares could go down as well as up and investors may therefore not recover their original investment, especially as the market in the Shares may have limited liquidity.

The Company's ability to pay dividends is not guaranteed.

As a matter of English law, the Company can pay dividends only to the extent that it has distributable reserves available. The ability of the Company to pay any dividends in respect of the Shares will depend on the level of the earnings, reserves and any ongoing regulatory capital requirements of the Company as well as its cash position and the judgement of the Directors. Accordingly, the amount of any dividends paid to Shareholders may fluctuate. Any change in tax or accounting treatment of any dividends may also affect the level of dividends received by Shareholders.

The Group's current banking facilities require that no dividends be paid until the accounts for the period to 30 June 2010 are delivered. Whilst the Board can give no assurances to Shareholders that the Company will be able to pay a dividend thereafter, the Board recognises the importance of dividends to Shareholders. For more information on the Company's dividend policy, see paragraph 6 of this announcement.

Non-UK Shareholders may not be able to participate in the Firm Placing and Placing and Open Offer and may experience a dilution of their ownership of the Company.

Securities laws of certain jurisdictions may restrict the Company's ability to allow participation by Shareholders in the Placing and Open Offer. In particular, the exercise of Open Offer Entitlements may not be available to Shareholders with a registered address in any country outside the UK. Subject to certain limited exceptions, non-UK Shareholders are not able to exercise Open Offer Entitlements granted in respect of Shares under the Open Offer and will not receive the economic benefit (if any) of such entitlements. Their proportionate ownership interests in the Company will therefore be diluted. Non-UK Shareholders, or Qualifying Shareholders who have registered addresses outside the UK, or who are citizens of or resident in countries other than the UK (including, without limitation, any of the Restricted Jurisdictions) should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities to enable them to receive New Ordinary Shares or to take up their entitlements under the Open Offer.

Further issues of Shares could impact on the market price of Shares.

It is possible that the Company may decide to offer additional Shares in the future although the Company has no current plans to do so. An additional offering of Shares by the Company or the public perception that an offering or sale may occur could have an adverse effect on the market price of Shares.

The Board currently has no plans to issue any Shares other than the New Ordinary Shares and Shares issued pursuant to the Lookers Share Schemes during the next 12 months.

ANNEX II

SUMMARY OF BANKING FACILITY AGREEMENT

1.    Banking Facility Agreement

Multi-currency term loan and revolving facilities agreement made between (1) the Company (2) the subsidiaries of the Company (together with the Company) listed as Original Borrowers (3) the subsidiaries of the Company (together with the Company) listed as Original Guarantors (4) Barclays Capital, HSBC Bank plc, Lloyds TSB Bank plc, National Australia Bank Limited, The Governor and Company of the Bank of Ireland and The Royal Bank of Scotland plc as Mandated Lead Arrangers (5) the financial institutions listed therein as Original Lenders (6) The Royal Bank of Scotland plc as Agent and (7) The Royal Bank of Scotland plc as Security Trustee originally dated 14 September 2006 (as amended and restated on 26 October 2007 and 29 May 2009).

Pursuant to the Banking Facility Agreement, the lenders thereunder (the 'Lenders') make available to the borrowers thereunder the following:

1.    a sterling term loan A of £106,732,320 ('Facility A');

2.    a sterling term loan B of £50,000,000 ('Facility B'); and

3.    a multi-currency revolving credit facility of up to £53,267,680 ('Facility C'),

(together the 'Facilities').

In addition to the above, there are certain ancillary facilities in existence to the Group the maximum aggregate exposure of which equals £8,560,000.

Interest is payable on each of the Facilities at 4% per annum above LIBOR plus mandatory costs and is payable in arrears on the last day of each interest period. In addition, further interest accrues on Facility B at the rate of 6% per annum. This PIK element of interest capitalises and is added to the amount outstanding on Facility B at the end of each month and is repayable in full on repayment of Facility B.

An anniversary fee of 0.75% is payable on the total facilities outstanding or available as at 1 July in each year, payable on such date and commencing on 1 July 2010.

The Facilities are repayable as follows:

1.    Facility A is repayable in full on 30 April 2012;

2.    Facility B is repayable in instalments of £5,000,000 on 30 June and 31 December in each year, beginning on 31 December 2009 with the balance repayable in full on 30 April 2012; and

3.    Facility C is repayable and, subject to the usual conditions as to availability, available for redrawing at the end of each interest period up to one month prior to 30 April 2012.

The Facilities are repayable on terms usual for facilities of their respective type, including mandatory repayments upon receipt of proceeds of any shares issued by the Company. Any such proceeds must first be used towards the repayment of Facility B.

In the event that Facility B is repaid early, Facility A is then repayable in the same instalments as set out above for Facility B.

The Banking Facility Agreement includes an obligation on the Company to pay certain fees to the Agent on behalf of the Lenders, including an anniversary fee (see above for details), and an over-leverage fee at the rate of 5% per quarter on the amount of any debt in excess of target debt, and to appoint a special adviser to assist the Company to improve its capital structure.

The Company makes certain representations, warranties and undertakings in favour of the Original Lenders. Non-standard undertakings given by the Company in the Banking Facility Agreement include:

(i)    a restriction on the payment of dividends such that the Company can only distribute a dividend where:

• no default is continuing under the Banking Facility Agreement;

• the Company's ratio of normalised bank debt to EBITDA is not more than 2:1 at the quarter date immediately before the payment;

• the ratio of cashflow to cash required for the repayment of interest and principal on the debt is not less than 1:1 at the quarter date immediately before the payment; and

• the directors certify to the Agent that the above ratios will not be breached in the six months following the payment.

(ii)    a prohibition on making amendments to any VSF or entering into any VSF other than to replace existing VSF on substantially the same terms and provided that the effect of such agreement would not be to:

• materially and adversely affect the rights of the lenders under the Banking Facility Agreement;

• in the case of a VSF commitment exceeding £5 million, increase the overall pricing of the VSF to more than 4% per annum (or 4.5% per annum in the case of the VSF provided by GMAC UK PLC); or 

• a decrease in the loan to value ratio or reduction in the funding percentage so as to cause a decrease to the amount available to be advanced against vehicles of more than £7.5 million.

The Banking Facility Agreement contains financial covenants which are tested by reference to the latest financial statements, management accounts and other financial information delivered by the Company, either in relation to that financial year or 12 month period ending on the relevant quarter date in relation to which the calculation falls to be made.

The financial covenant ratios are as follows:

(a)    Interest Cover

Column 1 Quarter Date	Column 2 Ratio shall not be less than:
30 June 2009	1.81:1
30 September 2009	2.07:1
31 December 2009	1.94:1
31 March 2010	1.74:1
30 June 2010	1.82:1
30 September 2010	1.96:1
31 December 2010	2.04:1
31 March 2011	2.06:1
30 June 2011	2.07:1
30 September 2011	2.08:1
31 December 2011 and each quarter date falling thereafter	2.09:1

(b)    Average Bank Debt Leverage

(Average Bank Debt to EBITDA)

Column 1 Quarter Date	Column 2 Ratio shall not exceed:
30 June 2009	4.68:1
30 September 2009	4.32:1
31 December 2009	4.21:1
31 March 2010	4.43:1
30 June 2010	3.81:1
30 September 2010	3.73:1
31 December 2010	3.42:1
31 March 2011	3.50:1
30 June 2011	3.26:1
30 September 2011	3.46:1
31 December 2011 and each quarter date falling thereafter	3.27:1

(c)    Average Total Debt Leverage

(Total Average Debt to EBITDA)

Column 1 Quarter Date	Column 2 Ratio shall not exceed:
30 June 2009	7.12:1
30 September 2009	6.42:1
31 December 2009	6.41:1
31 March 2010	6.83:1
30 June 2010	6.10:1
30 September 2010	5.89:1
31 December 2010	5.42:1
31 March 2011	5.56:1
30 June 2011	5.34:1
30 September 2011	5.55:1
31 December 2011 and each quarter date falling thereafter	5.28:1

(d)    Cashflow Cover

Column 1 Quarter Date	Column 2 Ratio shall not be less than:
31 December 2009	0.55:1
31 March 2010	0.80:1
30 June 2010	0.81:1
30 September 2010	0.84:1
31 December 2010	1:1
31 March 2011	1:1
30 June 2011	1:1
30 September 2011	1:1
31 December 2011	1:1

(e)    Capital Expenditure

Aggregate capital expenditure in any financial year cannot exceed 120% of the budget approved by the Agent.

The Banking Facility Agreement also contains events of default which again are customary for leveraged facilities of this type, upon the occurrence of which the lenders may terminate the Facilities, demand repayment and declare that all security become enforceable.  

The Facilities and supplemental ancillary facilities are secured by debentures, Scottish floating charges, Scottish standard securities and share pledges granted by all of the Group Companies which are not dormant in favour of the Security Trustee and cross guarantees granted by each such company.  

2.    Amended Banking Facility Agreement

Multi-currency term loan and revolving facilities agreement made between (1) the Company (2) the subsidiaries of the Company, together with the Company listed as Original Borrowers (3) the subsidiaries of the Company, together with the Company listed as Original Guarantors (4) Barclays Capital, HSBC Bank plc, Lloyds TSB Bank plc, National Australia Bank Limited, The Governor and Company of the Bank of Ireland and The Royal Bank of Scotland plc as Mandated Lead Arrangers (5) the financial institutions listed therein as Original Lenders (6) The Royal Bank of Scotland plc as Agent and (7) The Royal Bank of Scotland plc as Security Trustee originally dated 14 September 2006 (as amended and restated on 26 October 2007, 29 May 2009 and 26 June 2009). The Amended Banking Facility Agreement was entered into on the assumption and subject to the condition that the Placing and Open Offer is completed.

Pursuant to the Amended Banking Facility Agreement, the lenders thereunder (the 'Lenders') make available to the Original Borrowers the following:

1.    a sterling term loan A of £106,732,320 ('Amended Facility A'); and

2.    a multi-currency revolving credit facility of up to £53,267,680 ('Amended Facility C'),

(together the 'Amended Facilities').

In addition to the Amended Facilities, there are certain ancillary facilities in existence to the Group the maximum aggregate exposure of which equals £8,560,000.

Interest is payable on each of the above Amended Facilities at a margin ratchet of between 3 and 4% per annum above LIBOR plus mandatory costs and is payable in arrears on the last day of each interest period.

An anniversary fee of 0.75% on the total facilities outstanding available as at 1 July in each year, payable on delivery of the accounts for such period and commencing on 1 July 2010, if the leverage ratio is more than 2:1 on 30 June in that year.

The Amended Facilities are repayable as follows:

1.    Amended Facility A is repayable in full on 30 April 2012; and

2.    Amended Facility C is repayable and, subject to the usual conditions as to availability, available for redrawing at the end of each interest period up to one month prior to 30 April 2012.

The Amended Facilities are repayable on terms usual for facilities of their respective types, including mandatory repayment upon receipt of proceeds of any shares issued by the Company. The Lenders require that £65 million of the Net Proceeds is used to repay the term debt with the remaining proceeds to be used at the discretion of the Company.

Facility A will be repayable in instalments of £5 million on 30 June and 31 December in each year, beginning on 31 December 2009 with the balance repayable in full on 30 April 2012, save that the first instalment due on 31 December 2009 is not required if £65 million or more of Facility A and B under the Banking Facility Agreement are repaid from the Net Proceeds.

The Company makes certain representations, warranties and undertakings in favour of the Lenders. Non-standard undertakings given by the Company in the Amended Banking Facility Agreement include:

(i)    a restriction on the payment of dividends such that the Company can only distribute a dividend no earlier than following delivery of the accounts for 30 June 2010 and where:

• no default is continuing under the Amended Banking Facility Agreement;

• the Company's ratio of average bank debt to EBITDA is not more than 2.5:1 at the quarter date immediately before the payment;

• the ratio of cashflow to cash required for the repayment of interest and principal on the debt is not less than 1:1 at the quarter date immediately before the payment; and

• the Directors certify to the Agent that the above ratios will not be breached in the six months following the payment.

(ii)    a prohibition on making amendments to any VSF or on entering into any new VSF other than to replace existing VSF on substantially the same terms and provided that the effect of such agreement would not be to:

• materially and adversely affect the rights of the Lenders under the Amended Banking Facility Agreement;

• in the case of a VSF commitment exceeding £5 million, increase the overall pricing of the VSF to more than 4% per annum (or 4.5% per annum in the case of the VSF provided by GMAC UK PLC); or 

• a decrease in the loan to value ratio or reduction in the funding percentage so as to cause a decrease to the amount available to be advanced against vehicles of more than £7.5 million, breach of such provision shall only be a default of the leverage ratio is more than 2:1 on the most recent quarter date.

The Amended Banking Facility Agreement contains financial covenants which are tested by reference to the latest financial statements, management accounts and other financial information delivered by the Company, either in relation to that financial year or 12 month period ending on the relevant Quarter Date in relation to which the calculation falls to be made.

The financial covenant ratios are as follows:

(a)    Interest Cover

Column 1 Quarter Date	Column 2 Ratio shall not be less than:
30 June 2009	1.81:1
30 September 2009	2.15:1
31 December 2009	2.15:1
31 March 2010	1.97:1
30 June 2010	2.21:1
30 September 2010	2.46:1
31 December 2010	2.61:1
31 March 2011	2.66:1
30 June 2011	2.69:1
30 September 2011	2.70:1
31 December 2011 and each quarter date falling thereafter	2.71:1

(b)    Average Bank Debt Leverage

(Average Bank Debt to EBITDA)

Column 1 Quarter Date	Column 2 Ratio shall not exceed:
30 June 2009	4.69:1
30 September 2009	2.50:1
31 December 2009	2.36:1
31 March 2010	2.50:1
30 June 2010	2.06:1
30 September 2010	1.96:1
31 December 2010	1.76:1
31 March 2011	1.76:1
30 June 2011	1.59:1
30 September 2011	1.61:1
31 December 2011 and each quarter date falling thereafter	1.50:1

(c)    Average Total Debt Leverage

(Total Average Debt to EBITDA)

Column 1 Quarter Date	Column 2 Ratio shall not exceed:
30 June 2009	6.94:1
30 September 2009	4.38:1
31 December 2009	4.30:1
31 March 2010	4.71:1
30 June 2010	4.18:1
30 September 2010	3.95:1
31 December 2010	3.61:1
31 March 2011	3.66:1
30 June 2011	3.52:1
30 September 2011	3.55:1
31 December 2011 and each quarter date falling thereafter	3.37:1

(d)    Cashflow Cover

Column 1 Quarter Date	Column 2 Ratio shall not be less than:
31 December 2009	0.67:1
31 March 2010	1.00:1
30 June 2010	1.00:1
30 September 2010	1.00:1
31 December 2010	1:1
31 March 2011	1:1
30 June 2011	1:1
30 September 2011	1:1
31 December 2011	1:1

The financial covenants will be further amended to reflect the agreed headroom if different amounts are received by the Lenders in prepayment.

(e)    Capital Expenditure

Aggregate capital expenditure in any financial year cannot exceed 120% of the budget approved by the Agent.

The Amended Banking Facility Agreement also contains events of default which again are customary for leveraged facilities of this type, upon the occurrence of which the Lenders may terminate the Facilities, demand repayment and declare that all security become enforceable.  

The Amended Facilities and supplemental ancillary facilities are secured by debentures, Scottish floating charges, Scottish standard securities and share pledges granted by all of the Group Companies which are not dormant in favour of the Security Trustee and cross guarantees granted by each such company.

3.    Amendment and Restatement Agreement

Amendment and restatement agreement made between (1) the Company (2) the subsidiaries of the Company, together with the Company listed as Original Borrowers (3) the subsidiaries of the Company, together with the Company listed as Original Guarantors (4) Barclays Capital, HSBC Bank plc, Lloyds TSB Bank plc, National Australia Bank Limited, The Governor and Company of the Bank of Ireland and The Royal Bank of Scotland plc as Mandated Lead Arrangers (5) the financial institutions listed therein as Original Lenders (6) The Royal Bank of Scotland plc as Agent and (7) The Royal Bank of Scotland plc as Security Trustee (the 'Amendment and Restatement Agreement') and dated 26 June 2009.

Pursuant to the Amendment and Restatement Agreement, the Banking Facility Agreement will be amended and restated in the form of the Amended Banking Facility Agreement.

Such amendment and restatement is conditional upon receipt by the Lenders under the Banking Facility Agreement of the lower of (i) the Net Proceeds and (ii) £65,000,000, provided that the amount received shall be at least £50,000,000 plus all accrued interest on Facility B (under the Banking Facility Agreement).

  ANNEX III

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

'Admission'	admission to listing of the New Ordinary Shares on the Official List and admission to trading of the New Ordinary Shares on the main market of the London Stock Exchange and a reference to Admission becoming 'effective' is to be construed in accordance with the Listing Rules or the Standards (as applicable)
'Amended Banking Facility Agreement'	the amended banking facility agreement entered into on the date of this announcement
'APEC'	APEC Braking Limited
'Banks'	Rothschild and Numis
'Banking Facility Agreement'	the banking facility agreement entered into on 29 May 2009
'Board'	the board of directors of the Company
'BTN'	BTN Turbo Charger Service Limited
'Business Day'	any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday or Sunday or a public holiday
'Closing Price'	the closing middle market quotation as derived from the Daily Official List of the London Stock Exchange on a particular day
'Company' or 'Lookers'	Lookers PLC, a company registered in England and Wales with registered number 00111876
'Conditional Placed Shares'	the Open Offer Shares to be allotted and issued by the Company under the Placing subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer, pursuant to the Placing Agreement
'Conditional Placees'	any persons who have agreed to subscribe for Conditional Placed Shares
'CREST'	the relevant system (as defined in the CREST Regulations) operated by Euroclear in accordance with which securities may be held or transferred in uncertificated form
'Directors'	the directors of the Company and 'Director' shall mean any one of them
'EBIT'	earnings before interest and tax
'EBITDA'	earnings before interest, tax and depreciation
'Enlarged Issued Share Capital'	the 383,526,765 Shares which will be in issue following completion of the Firm Placing and Placing and Open Offer (assuming that no further options are exercised between the date of this announcement and Admission)
'EU'	the European Union
'Euroclear'	Euroclear UK & Ireland Limited, a company registered in England and Wales with registered number 2878738, the operator of CREST
'Executive Directors'	Ken Surgenor, Robin Gregson, Brian Schumacker, Andrew Bruce, Terry Wainwright and Peter Jones
'Existing Shares'	Shares in issue as at the Record Date
'Firm Placed Shares'	the 50,464,048 New Ordinary Shares to be allotted and issued by the Company under the Firm Placing
'Firm Placees'	any persons who have agreed to subscribe for Firm Placed Shares
'Firm Placing'	the conditional placing by Numis of the Firm Placed Shares with the Firm Placees pursuant to the Placing Agreement
'FSA'	the Financial Services Authority
'FSMA'	Financial Services and Markets Act 2000, as amended
'FPS'	FPS Distribution Limited
'General Meeting'	the general meeting of the Company to approve the Resolutions
'Group'	the Company and its subsidiaries and subsidiary undertakings and 'member of the Group' shall be construed accordingly
'IFRS'	International Financial Reporting Standards as adopted for use in the EU
'Issue Price'	40 pence per New Ordinary Share
'LIBOR'	the London Inter-Bank Offer Rate
'Listing Rules'	the listing rules and regulations made by the FSA under s73A of FSMA, as amended from time to time
'London Stock Exchange'	London Stock Exchange plc
'MVBER'	Motor Vehicle Block Exemption (Commission Regulation (EC) No 1400/2002)
'Net Proceeds'	approximately £76.5 million, being the net proceeds from the issue of the New Ordinary Shares under the Firm Placing and Placing and Open Offer
'New Ordinary Shares'	new Shares proposed to be issued by the Company pursuant to the Firm Placing and Placing and Open Offer
'Non-CREST Application Form'	the application form for use by Qualifying Non-CREST Shareholders relating to applications for Open Offer Shares
'Numis'	Numis Securities Limited
'Official List'	the Official List of the UK Listing Authority
'Open Offer'	the invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares on the terms and conditions to be set out in the prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Non-CREST Application Form
'Open Offer Entitlement'	a pro rata entitlement to apply to subscribe for Open Offer Shares allocated to a Qualifying Shareholder under the Open Offer
'Open Offer Shares'	the 151,392,144 New Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer
'Placing'	the placing by Rothschild and Numis of the Open Offer Shares pursuant to the Placing Agreement
'Placing Agreement'	the conditional agreement dated 26 June 2009 between (1) the Company and (2) Numis
'Prospectus Rules'	prospectus rules made by the FSA under s73A of FSMA, as amended from time to time
'Qualifying CREST Shareholders'	Qualifying Shareholders whose Shares on the register of members of the Company on the Record Date are in uncertificated form
'Qualifying Non-CREST Shareholders'	Qualifying Shareholders whose Shares on the register of members of the Company on the Record Date are in certificated form
'Qualifying Shareholders'	holders of Shares on the Company's register of members on the Record Date (but excluding, subject to certain exceptions, any holder who has a registered address in a Restricted Jurisdiction)
'Registrar'	Capita Registrars
'Resolutions'	the Special Resolution and the Related Party Resolutions
'Regulation S'	Regulation S promulgated under the Securities Act
'Related Party Resolutions'	the ordinary resolutions to be set out in the notice of General Meeting to authorise the participation of Tony Bramall and Trefick Limited as Placees in the Firm Placing and the Conditional Placing
'Restricted Jurisdiction'	each of Australia, Canada, Japan, South Africa and the United States
'Rothschild'	N M Rothschild & Sons Limited
'Securities Act'	the United States Securities Act of 1933 (as amended)
'Shareholders'	holders of Shares, each individually being a 'Shareholder'
'Shares'	ordinary shares of 5 pence each in the capital of the Company
'SMMT'	The Society of Motor Manufacturers and Traders Limited
'Special Resolution'	the special resolution to be set out in the notice of General Meeting to authorise the Firm Placing and Placing and Open Offer
'Standards'	the 'Admission and Disclosure Standards' of the London Stock Exchange
'UK' or 'United Kingdom'	the United Kingdom of Great Britain and Northern Ireland
'UK Listing Authority'	the FSA acting in its capacity as competent authority for the purposes of Part VI of FSMA
'uncertificated' or 'in uncertificated form'	Shares recorded on the register as being held in uncertificated form in CREST, entitlement to which may be transferred by means of CREST
'United States' or 'US'	the United States of America, its territories and possessions, any State of the United States and the District of Columbia
'VSF'	Vehicle Stocking Facility

In this announcement all references to times and dates are a reference to those observed in London, UK.

In this announcement the symbols '£' and 'p' refer to pounds and pence Sterling respectively.

 

END

 

 

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