It’s been a long and often difficult journey for Lookers chief executive Mark Raban as he has steered the UK’s third-largest motor retail chain towards new ownership under the deal announced today with Canada’s Alpha Auto Group.

Mr Raban joined from Marshall Motor Group in 2019 as Lookers’ chief financial officer and moved into the top post a few months later following the departure of chief executive Andy Bruce after a “disappointing” downturn in trading. That was immediately prior to the onset of the Covid pandemic, with health-related trading restrictions pushing the Manchester-based group into a £50 million loss in 2020 as it was forced to close its showrooms for large parts of the year.

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During that year the group also uncovered a £19m hole in its accounts related to “misrepresented and overstated debtor balances” and “a number of fraudulent expense claims” within one of its operating divisions. This triggered a tough two years as the Financial Conduct Authority (FCA) scrutinised compliance procedures while Lookers worked with the financial regulator to resolve any concerns.

Things began to turn a corner when the group posted a record underlying pre-tax profit of £90.1m for 2021, driven primarily by surging margins on used vehicles as Covid disruptions and global semiconductor shortages cut the supply of new cars coming off the assembly line. That was followed by a pre-tax profit of £81m in 2022, which represented growth of 3% after the exclusion of £9.8m of Covid government grant support received the previous year.

With revenues of £4.3 billion last year, Lookers is considerably larger than Ontario-based Alpha Auto, whose revenues in 2022 amounted to $1bn (£786m). Alpha is paying 120p for each share in Lookers, valuing the group at £465.4m or about 35 per cent more than its market value on Monday, the last day of trading before the deal was announced.

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This has raised speculation that more listed UK car groups could follow Lookers into private or overseas ownership, with the move by Alpha highlighting the value for money on offer within the sector. Shares in Pendragon and Vertu are trading more than 6% and 7% higher respectively this afternoon.

The Lookers board have unanimously backed the offer from Alpha along with investors who hold 42% of the London-listed company’s shares, but there remains an outside possibility that a rival could step in with a last-minute counter-offer. Liberum analyst Sanjay Vidyarthi said the deal “looks low” and reckons the shares are worth closer to 150p each.