Statement re Possible Offer

Pendragon PLC
27 January 2006

Not for release, publication or distribution, in whole or part, in, into or from
                 the United States, Canada, Australia or Japan.


For immediate release                                            27 January 2006



                          Pendragon PLC ('Pendragon')


                   Possible Offer for Lookers plc ('Lookers')
and Statement Regarding Pendragon's Call Option over Reg Vardy plc ('Reg Vardy')
                                     Shares





Possible Offer for Lookers



Pendragon announces that it has made two formal approaches to the Board of
Lookers to discuss the terms of a possible three-way consolidation of Lookers,
Reg Vardy and Pendragon, to be effected through the existing cash offer by
Pendragon for Reg Vardy at a price of 800 pence per Reg Vardy share and a share
exchange offer by Pendragon for the entire issued share capital of Lookers.



On 14 December 2005, at Pendragon's request, a meeting took place between
Pendragon and Lookers. Following that meeting, on 21 December 2005, Pendragon
made an initial indicative offer (the 'Initial Proposed Offer') to acquire the
entire issued share capital of Lookers by way of a share exchange offer. The
exchange ratio in the Initial Proposed Offer was one new Pendragon share for
each Lookers share. The Initial Proposed Offer was rejected by the Board of
Lookers on the basis that it 'very substantially undervalue(d) the Company'.



On 12 January 2006, Pendragon made a revised indicative offer to Lookers (the 
'Revised Proposed Offer'). The exchange ratio in the Revised Proposed Offer was
1.15 new Pendragon shares for each Lookers share. Based on the closing share
prices of Lookers and Pendragon on the business day prior to the Revised
Proposed Offer being made, the Revised Proposed Offer valued each Lookers share
at 600 pence, a 26.9 per cent. premium to the Lookers share price at that time
and a premium of 44.3 per cent. to the closing Lookers share price of 415.5
pence on 15 November 2005, the day prior to Reg Vardy's announcement that it had
received an approach from Pendragon in relation to a possible offer.



Lookers responded to the Revised Proposed Offer in a letter to Pendragon dated
16 January 2006. At that time, Lookers stated that its Board was not prepared to
enter into discussions relating to the Revised Proposed Offer.



In light of the announcement by Lookers on 17 January 2006 of its proposed
acquisition of Reg Vardy, Pendragon is making this announcement in order to
allow it freely to discuss the Revised Proposed Offer with Lookers shareholders.



Pendragon believes that the synergies available from a three-way combination of
Lookers, Reg Vardy and Pendragon should be considerable and, through a share
exchange offer, Lookers shareholders would benefit from the proven track record
of Pendragon management of integrating large acquisitions and extracting
synergies. Pendragon is confident that it has the management experience
necessary to integrate the businesses of both Reg Vardy and Lookers
simultaneously and successfully.



Such a combination would also allow Lookers shareholders to exchange their
existing holdings for shares in an enlarged group which would be both
well-capitalised and the clear industry leader.



Pendragon believes that the earnings of an enlarged Pendragon group following
the acquisitions of Reg Vardy and Lookers, before synergies, would be
immediately enhanced compared with the earnings of Pendragon on a stand-alone
basis (although this statement should not be interpreted to mean that the
earnings per share of such an enlarged Pendragon group would necessarily be
greater than or equal to those of prior years).



The Revised Proposed Offer was subject to certain pre-conditions, including,
inter alia,: (i) Lookers' proposed acquisition of Reg Vardy not proceeding; (ii)
Pendragon being permitted access to Lookers to undertake a limited due diligence
exercise and (iii) the Board of Lookers recommending the terms of the Revised
Proposed Offer. Pendragon reserves the right to waive any of these
pre-conditions.



This announcement does not represent a firm intention to make an offer to
acquire the entire issued share capital of Lookers and, accordingly, there can
be no certainty that any offer to acquire the entire issued share capital of
Lookers will be made, even if the above pre-conditions are satisfied or waived.



Statement Regarding Reg Vardy Call Option and Voting Intention



Lookers' proposed acquisition of Reg Vardy is conditional upon, inter alia, the
approval of Reg Vardy shareholders at a Court Meeting and at an Extraordinary
General Meeting (together the 'Reg Vardy Shareholder Meetings'). In order for
the required resolution(s) to be passed, Reg Vardy shareholders representing at
least 75 per cent. by value of those present in person or by proxy must vote in
favour.



As previously announced, Pendragon has entered into an arrangement with Sir
Peter Vardy which allows it to acquire, at its option, 9,348,111 Reg Vardy
shares, representing 16.6 per cent. of the existing issued share capital of Reg
Vardy, at a price of 800 pence per Reg Vardy share (the 'Call Option').
Pendragon currently intends, prior to the Reg Vardy Shareholder Meetings, to
exercise its rights under the Call Option and vote against the acquisition of
Reg Vardy by Lookers.



As a consequence of entering into irrevocable undertakings in favour of
Pendragon in connection with its existing cash offer for Reg Vardy, certain Reg
Vardy shareholders, including Reg Vardy Directors and persons connected with
them, are prevented from voting at any shareholder meeting to approve the
proposed acquisition of Reg Vardy by Lookers. Therefore, if the Call Option is
exercised, a total of 5,942,906 Reg Vardy shares would be prevented from voting
in favour of the proposed acquisition of Reg Vardy by Lookers.



The Reg Vardy shares held under the Call Option represent 18.6 per cent. of the
Reg Vardy shares that are able to vote at the Reg Vardy Shareholder Meetings.
Accordingly, on the basis of the current issued share capital, if a further
3,229,388 Reg Vardy shares, representing 6.4 per cent. of the Reg Vardy shares
able to vote at the meetings (being 5.7 per cent. of the total Reg Vardy issued
share capital), were voted against the relevant resolutions in addition to the
shares subject to the Call Option, Lookers' proposed acquisition of Reg Vardy
would fail.



                             *    *    *    *    *



There will be a meeting for analysts at 9.30 a.m. today at the offices of
Finsbury Group, Tenter House, 45 Moorfields, London EC2Y 9AE.



Enquiries:



Pendragon PLC
Trevor Finn, Chief Executive
David Forsyth, Finance Director
Telephone: [phone]



Citigroup Global Markets Limited
(Financial adviser and corporate broker to Pendragon)
Philip Robert-Tissot
Sam Small
Chris Zeal (Corporate Broking)
Telephone: [phone]



Finsbury Group
(Public relations adviser to Pendragon)
Rupert Younger
Gordon Simpson
Telephone: [phone]



Citigroup Global Markets Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
Pendragon and for no one else in connection with the matters discussed in this
announcement and will not be responsible to any other person for providing the
protections afforded to clients of Citigroup Global Markets Limited or for
providing advice in relation to the matters discussed in this announcement.



Dealing disclosure requirements



Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Pendragon or of Lookers or of Reg Vardy, 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 relevant offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or on which
the relevant '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 Pendragon, Lookers or Reg
Vardy, 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 Pendragon or of Lookers by Pendragon or Lookers, 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.



Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Reg Vardy by Pendragon or Reg Vardy, 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 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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