Global Auto Holdings said Tuesday it plans to buy British car dealership chain Lookers for about 465.4 million pounds ($595 million) in cash.
Global Auto Holdings values Lookers at 120 pence per share, a premium of 35 percent to the stock’s closing price on Monday.
Global Auto Holdings, an entity related to privately-owned Canadian car dealer network Alpha Auto Group by having the same owner, said the acquisition enables its entry to the UK market and supports its bid to become a global auto retailer.
Lookers directors said they intend to unanimously recommend the offer to shareholders.
Lookers, which sells new and used cars and vans and offers after-sales services, in April raised its 2023 profit forecast, supported by robust trading in used vehicles, stable margins and improvement in supply.
Shares in Lookers surged as much as 35 percent to their highest level since September 2017.
Alpha Auto Group also has a presence in the U.S., entering the country with its 2018 purchase of Wilsonville Subaru and Wilsonville Toyota in Oregon.
The Toronto retailer bolstered its U.S. holdings and entered a new state when it acquired Mercedes-Benz of Fresno in California in November. Alpha Auto now lists Audi Great Neck and Biener Ford in New York among its dealerships, according to its website.
The Canadian retailer’s entry into the U.K. via General Auto Holdings comes three years after a May 2020 media report said that dealership group Pendragon had stopped pursuing a merger with rival Lookers.
Julie Walker contributed to this report.