Predatory car retailer Pendragon tried once again to force the pace in the consolidation of the sector as it launched a £258.8 million hostile takeover offer for its smaller rival Lookers.

In response, Lookers issued a holding statement, saying it was "reviewing the situation" and urging shareholders to take no immediate action.

Lookers has already rejected a three-way merger proposal put forward by Pendragon in late January involving the two British car dealership and their fellow competitor Reg Vardy.

After an energetic tussle with Lookers, Pendragon successfully took over Reg Vardy in a recommended 900p a share deal worth £506 million.

Pendragon today offered 1.15 of its new shares for each Lookers share at a price it said valued each Lookers share at 725p.

The offer represents an extraordinary 95 per cent premium to the 370.7p at which Lookers has been trading over the past 12 months, underscoring the strategic importance of being at the forefront of the sector's consolidation.

Its offer is conditional on gaining the acceptance of more than half of Lookers' shareholders.

Sir Nigel Rudd, the Pendragon chairman who has been involved in four potential takeovers over the past year, reiterated the dealers' view that there are "significant benefits" of the continuing mergers and acquisitions activity in British car retailing.

He also said he would have preferred to have had the backing of Lookers' management.

"While we would have preferred to make this offer on a recommended basis, we have so far been unable to engage the board of Lookers in meaningful discussions," Sir Nigel said.

"Therefore, we are making these proposals directly to Lookers' shareholders and are confident that they will be supportive of what we believe to be a very compelling offer."

Shares in Pendragon lost just under 3.5 per cent of their value this morning in a rising wider market. The fall of 22p to 608p suggests the retailers' shareholders are concerned it might overpay on its acquisitions spree. Pendragon has a stock market value of about £826 million.

For full details on Pendragon shares click here

Shares in Lookers, however, soared more than 10 per cent, jumping 62.75p to 672.75p, suggesting its shareholders believe Pendragon is prepared to pay a higher price to secure control.

For Lookers share details click here

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