Cinch is to vote against the planned £465m takeover of car dealership chain Lookers by a Canadian group, it has emerged.
The company, which holds a stake of around 19.2% in the Altrincham-headquartered business has withdrawn its letter of intent to back the acquisition by Alpha Auto Group, an Ontario-based car dealership chain.
The deal was first announced on June 20 and valued the company at around £465.4m.
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At the time, Lookers said that shareholders TDR Capital, Artemis Investment Management, J O Hambro and Schroder had all promised to vote for the deal.
If the deal goes through, Alpha Auto Group will buy Lookers through its Global Auto Holdings Limited, which is owned by Alpha’s founder and referred to as Bidco in the stock exchange filing.
In a statement issued to the London Stock Exchange, Lookers said: "The Lookers Directors now believe that shareholders representing in excess of 25% of the voting rights of the company intend to vote against the Resolutions and therefore that the resolutions are not capable of being passed.
"The court meeting and general meeting convened in connection with the acquisition are scheduled to take place on 27 July 2023.
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"In the event that the Resolutions do not pass, as the Lookers directors now expect, the scheme of arrangement will lapse and Lookers will remain an independent listed company.
"In this event, the Lookers directors will continue to pursue constructive engagement with all shareholders, including Cinch, who continues to be the company's largest shareholder holding approximately 19.52% of the issued share capital.
"As stated in the scheme document, the Lookers directors remain confident in the future prospects of Lookers to create sustainable value for all stakeholders.
"A further announcement will be made in due course, as appropriate."
The owner of WeBuyAnyCar.com and Cinch first bought a 19.9% stake in Lookers in January this year.
The majority of the shares snapped up by Constellation Automotive Holdings were purchased at a price of 102p each from Tony Bramall (and associates), who stepped down as a non-executive director from the Lookers board in December 2020 after a term of 14 years.
Lookers reported a pre-tax profit of £84.4m last year on a revenue of £4.3bn. It employs around 6,500 people.
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Founded in Manchester in 1908 by John Looker, the business originally sold bicycles, and the occasional used car.
The business quickly switched to selling mainly cars, and in 1973 it listed on the London Stock Exchange.