Response to Pendragon

Lookers PLC
27 January 2006



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                                                                 27 January 2006

                                  Lookers Plc

       Posting of Scheme Circular and response to Pendragon announcement

Lookers ('Lookers' or 'the Company') today confirms the posting of the Scheme
circular to Reg Vardy plc ('Reg Vardy') shareholders containing the terms of
Lookers's recommended acquisition of the entire issued share capital of Reg
Vardy.  Under the terms of the acquisition Reg Vardy shareholders will receive
875 pence in cash for each Reg Vardy share, valuing Reg Vardy at approximately
£492 million.

Lookers reiterates that the Board of Reg Vardy has unanimously recommended that
Reg Vardy shareholders vote in favour of the Scheme to effect the acquisition,
which if successful, will deliver 875 pence in cash for every Reg Vardy share.
This compares with the current Pendragon PLC ('Pendragon') offer of 800 pence in
cash for every Reg Vardy share.

In addition, the Board of Lookers notes the announcement made this morning by
Pendragon regarding its approaches to Lookers and wishes to clarify the
following points:

  • In considering Pendragon's indicative approaches to Lookers, the Board of
    Lookers took into account the significant number of pre-conditions attaching
    to the proposals, the nature of the consideration being offered and the
    inadequate premium over the prevailing Lookers's share price.

  • The Lookers Board, after consultation with its advisers, unanimously
    concluded that the proposal fundamentally undervalued Lookers's future
    prospects.  The benefits of acquiring Reg Vardy are significant for Lookers
    shareholders and the Lookers Board believes that these would be diluted as
    part of a three way merger.

  • Pendragon's approach to Lookers occurred shortly after Lookers's interest
    in Reg Vardy became public.  Prior to this Pendragon had never expressed any
    interest in an acquisition of Lookers.  It should be emphasised that
    Pendragon has not announced a firm intention to make an offer for Lookers
    and there is no certainty that such an offer will be made by Pendragon.

  • In the event that the Scheme is successful all of the benefits of a
    combination of Lookers and Reg Vardy will accrue to existing Lookers
    shareholders.  The Lookers Board is also confident that the acquisition will
    be positively received by all its other stakeholders.  In contrast, it
    believes that significant stakeholders, including manufacturer partners, may
    regard a three way combination of Pendragon, Lookers and Reg Vardy as
    negative for the sector and could lead to commercial disadvantage for an
    enlarged Pendragon group.

  • The acquisition of Reg Vardy by Lookers is subject to the approval of
    Lookers's shareholders in an extraordinary general meeting to be convened
    shortly.  The resolution to approve the acquisition requires a simple
    majority of Lookers's shareholders who are present and voting.

  • Lookers has received irrevocable undertakings to vote in favour of the
    acquisition at the Lookers EGM from Lookers shareholders (including the
    Directors of Lookers) holding 11,138,947 shares representing approximately
    31.2 per cent of the issued share capital of Lookers.

In accordance with Rule 2.10 of The City Code on Takeovers and Mergers, Lookers
announces, that as at the close of business on 26 January 2006 its issued share
capital consisted of 35,727,093 ordinary shares of 25 pence each.  The
International Securities Identification Number for Lookers's ordinary shares is
GB0005344469.

Enquiries:

Ken Surgenor
David Dyson
Lookers plc                                                        0161 291 0043

Andrew Thomas
N M Rothschild & Sons Limited                                      0161 827 3800

Christopher Wilkinson
Numis Securities Limited                                           020 7776 1500

Andrew Hayes/Nick Lyon
Hudson Sandler                                                     020 7796 4133

Dealing Disclosure Requirements:

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

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

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

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

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


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