LOOKERSPLC

1 THISDOCUMENT AN D THE ACCOMPANYINGFORMOF PROXYAREIM PORTAN T ANDRE you are in an y do ubt as to the ac tion you sh ouldtake , you ar e rec ommended to see k yourownpers ona l financialadviceas soonas possible fro m yourstockbroker, bank,solicitor,accountan t, fun d man age r or othe r ap propria te ind epe ndentfinancialadviser auth ori sed unde r the FinancialServicesand MarketsAct 20 00 if yo u are in the UnitedKing dom,or, if not, fromanother appropriately auth orisedin dependentfinancialad yousellortransferorhavesoldorotherwisetr ansferredallof yourSh ar es,pl easeforwardthisdocument(butnotanypersona lisedFormofProxy),assoonaspossibletothep urchaserortransferee,ortothebank,stockbr okerorotheragentthr oughwhomthesaleor transferwaseffected, youhavesoldorotherwisetransferredonlypar tofyourholdingofShares,pleaseconsulttheb ank,stockbrokerorotheragentthroughwhomth esaleortransferwaseffected.

2 If youreceivethisdocumentfromanotherShareho lder,asa purchaserortransferee,pleasecontacttheRe gistrarfora personalis edFormof (including,withoutlimitation,custodians, nomineesandtrustees)whomayhavea contractualorlegalobligationormayotherwi seintendtoforwardthisdocumenttoanyjurisd ictionoutsidetheUnit edKingdomshouldseekappropriateadvicebefo retaking anyaction. Thedistributionof thisCircularandan y accompanyingdocumentintojurisdict ionsotherthantheUnitedKi s vi olationof thesecuritieslawofan y (Incor poratedand regist ered in Engl and and Wales with RegisteredNo. 00111876)Pr oposedDisposalof PartsandNoticeof GeneralMeetingPeelHuntFinancialadviseran dSponsorThisdocumentshould bereadasa drawnto thelet ter fr omtheChairmanof Lookerswhi chis setoutin PartIof thisCircularandwhichcontainstheunanimous recommendationbytheLookersDirectorsthaty ouvotein favourof theresolutionto beproposedat theGeneral passedat ,tobeheldat theregisteredoffice ofLookers,776 ChesterRoad,St retford, 2016,is set outat theendofth is s Circulara FormofProxyforuseinco ,pleasecompl eteandsigntheenclosedFormofPr oxyinaccordancewiththeinstructionspr intedonit andreturnit totheCompany sRegistrar,CapitaAssetServices,PXS, 34 BeckenhamRoad,Beckenham,KentBR34 TUassoonaspossibleand,in anyevent, onlineby vi sitingCapita ,youwillneedtoenteryourinvestorco dewhi chis setoutontheenclosedFo rmofProxy.

3 Andyouwillneedtoensurethatyour voteis a. youholdyourSharesinCREST,andyouwish toappointa proxyorproxiesthroughtheCREST electronicproxyappointmentservice,youmay dosobyusingtheproceduresdescribedintheCR ESTM anual( ).In orderforaproxyappointmentorinstructionma deusingtheCREST servicetobevalid,theappropriateCRESTP roxyInstructionmustbeproperl y authenticatedin accordancewith Euroclear sspecifications,andmustcontain theinf ormationrequiredforsuchinstruction,as describedin ,regardlessof whetherit constitutestheappointmentof a proxyoris anamendmentto thein structiongiventoa previouslyappointedproxymust,inordertobe valid,betr ansmittedsoastobereceivedbyCapita,IDRA10 by10 .3 0 ,whichis authorisedandregulatedbytheFinancialCond uctAuthority in theUnitedKingdom,is actingsolely forLookersandnooneelseinconnectionwithth eDisposalan d,saveforanyresponsibili tywhich mayariseunderFSMA ortheregulatoryregimeestablishedthereund er,willnotberesponsibletoanyoneotherthan Lookersforprovidingtheprotectionsafforde dtotherespectiveclientsof PeelHuntorfo r pr ovidingadviceinconnectionwit h theDisposal,thecontentsofthisdocumentora nytransaction, a circularrelatingtotheDisposal whichhasbeenpr discussionof therisksrel ati ngto theDisposal,seethediscussionof risksanduncertaintiessetoutinPartII (Risk Fact ors Relati ng to the Di sposal) cribedtotheminPart VIII(Defini tions)

4 Summaryof actionto be takenby Shareholdersis set out on page8 of thi s Ci rcul ar and in the Noti ce of GeneralMeetingset outat the end of this (2)PD AnnexI(5 . ) (5 ) (2 ) (1)LR (6) (4)2 TABLE OF CONTENTSPageEXPECTEDTIMETABLE OF ,COMPANYSECRETARY, ST ATEMENTOF NETASSETSOF METABLE OF PR IN CIPALEVENTST imeand ofthisCircular, September 2016 Latesttimean d dateforreceiptofFormsofProxy,CREST ProxyInstructionsandregistrationofonline votesfr 2016 Expecteddateofcompletionofth e Disposal(s ubjecttoapproval)..Last Quarter2016 Notes:(1)AllreferencesinthisCirculartoti mesaretoLondontimesunlessotherwisestated .(2) anyoftheabovetimesand/ordatesshouldchang e,thenewtimesand/ordateswillbenotifiedto theFinancialConductAuthorityandannounced toShareholdersthrougha rwardlo okingstatementsThisdocument containscertain forwardlookingstatements relatingto theGr oup,theContinuingGroup,thePartsDivisiona ndtheDisposal,includingwithrespecttocert ainoftheGroup splansanditscurrentgoalsandexpectationsr elatingtoitsfut urefinancialcondition,performance,result s, believes , intends , should , plans , pursues , seeks and anticipates (ornegativesthereof)

5 ,andvariationsthereoforwordsofsimilarmea ning, ,allforwardlookingstatementsinvolveassum ptions,riskanduncertainty becausetheyrelatetofutureev entsandcir cumstanceswhichar e beyondLookers controlincluding,amongotherthings,thedom esticandglobaleconomicandbusinessconditi ons,market-relatedriskssuchasfluctuation sininterestratesandexchangerates,andthep erformanceoffinancialmarketsgenerally,th epoliciesandactionsofregulatoryauthoriti es,theimpactofcompetition,inflationandde flation;thetiming,im pactandotheruncertaintiesoffutureacquisi tionsorcombinationswithinrelevantindustr iesandtheimpactofchangesincapital,solven cy oraccountingstandards, result, Lookers actualfuturefinancialcondition,performan cean d resultsmaydiffermateriallyfromtheplans,g oalsandexpectationssetforthin theforwardlooking statementsandnoas forwardlookingst atementsmadehereinspeakonlyasofthedateth eyar e ,theLondonStockExchangeoranyotherapplica blelaworregulation,Lookersexpresslydiscl aimsanyobligationorundertakingtoreleasep ubliclyan y updatesorrevisionstoanyforwardlo okingstatementscontainedin thisdocumentto reflectanychangein Lookers expectationswithregardtheretooranychange inevents,conditionsorcircumstancesonwhic hanysuch is documentdonotinanywayseektoqualifythewor kingcapitalstatementcontainedinSection10 ofPartVII(Additi onal Information)

6 ,COMPANYSECRETARY, REGISTEREDOFFICEAND (Non-E xecutiveChairman) (Chief Execut ive)RobinA. Gregson(F inance Direct or)NigelJ. McMinn(ManagingDirector Motor Divi sion) (ManagingDirector Parts Divisi on)WilliamHolmes(SeniorNon- ExecutiveDir ector) (Non Execut ive Di rector)RichardS. Walker(Non-ExecutiveDirector)SallyJ. Cabrini(Non-ExecutiveDirector)COMPANYSEC RETARYG lendaMacGeekieREGISTEREDOFFICE776 ChesterRoadStretfordManchesterM320 QHFINANCIAL ADVISERANDSPONSORPeelHuntTO LOOKERSMoorHouse120 LondonWallLondonEC2Y5 ETLEGALADVISERTO LOOKERSE vershedsLLP70 GreatBridgewaterStManchesterM15 ESREGISTRARSTO LOOKERSC apitaAssetServicesTheRegistry34 BeckenhamRoadBeckenhamKentBR34 ZFAUDITORSTO LOOKERSANDD eloitteLLPREPORTINGACCOUNTANTS2 HardmanStreetManchesterM33 HFLR (2)PD AnnexI( )5PA RT ILETTERFR OM THECHAIRMANOF LOOKERS(Incorporatedand registeredin Englandand Wales with RegistrationNo.)

7 00111876)Di rec tors: (Non-ExecutiveChai rman) (Chief Ex ecuti ve) (FinanceDirect or)ManchesterNigelJ. McMinn(ManagingDirector Motor Divi sion) (ManagingDirector Parts Divi si on)WilliamHolmes(SeniorNon- ExecutiveDir ector) (Non-Executive Direct or)RichardS. Walker(Non-ExecutiveDi rect or)SallyJ. Cabrini(Non-ExecutiveDir ector)DearShareholder,PROPOSEDDISPOSALOF August2016,th e LookersBoardannouncedthatLookershadenter edintoa conditionalagreementwithrespecttothesale ofth e entireissuedsharecapitalofFPSD istributionLimited,whichcompr is estheParts DivisionoftheGroup,to AllianceAutomotivefora considerationofap proximately 120millionona de btfre e andcashfreebasis, September ,priortobeingapproachedbyAlliance Automotive,wehadexpectedtocontinuetoownt hePartsDivisionaspart ofa diversifiedstr , theLookersBoardbelievesthatAllianceAutom otive s offerforthePartsDivisionrepresentsanattr activesalepriceforLookersandanopportunit yfortheGrouptodeployfurthercapitalintoac quisitionsfortheMotorDivision,whichis expectedtogeneratenetproceedsofapproxima tely 11 9 millionona debtfr eeandcashfreebasis,excludingcustomaryadj ustments.

8 Lookersintendsto usethoseproceedsto pursueacquisitionsintheMotorDivisionover theshortandmedium-term, relatingto(i)theacquisitionoftheDraytonG roupfor millioncomprisingofsevenMercedesBenzdeal ershipslocatedintheWestMidlands,completi onofwhichis subjecttocompletionof theDisposal, followedby(ii)thesimultaneousexchangeand completionof theacquisitionof theentireissuedsharecapitalofKnightsNort hWestLimitedwhichtradesasKnightsMiniandB MWandhasdealershipslocatedinStaffordshir e,Stoke-on-TrentandCrewefor oftheDisposalasif it hadoccurredat set , sunderlyingoperatingprofit(1)andrepresen ted10 s (5) (2)(f) (1) (3) (2)(h) (3) (2)(c) (2)PD Annex1(5 . )PD Annex1(5 . )(1)Profitfromoperationsbeforeamortisati on,sharebasedpayments,impairmentofgoodwi llandexceptionalitems6 Given thecurrentlowlevelof interestratesavailable oncashdeposits,thesaleofthePartsDivision willbeearningsdilutivetotheGroupuntilthe capitalcanbesuccessfully ze,theDi sposalconstitutesa class1 transactionfortheCompany undertheListingRulesandis conditionalupon,amongstotherthings,theap proval of Shareholdersunder GeneralMeetingis tobeheldattheregistered office ofLookers,776 ChesterRoad,Stretford,ManchesterM320 QHat 10.

9 3 0 noticeconveningtheGeneralMeeting,atwhich th e DisposalResolutionwillbeproposed,is ,includingthebackgroundtoandreasonsforth eDisposal,andexplainswhytheLookersBoardc onsiderstheDisposalto bein thebestinterests of LookersandtheSh areholdersasa CONDITIONSOF TH E DI SPOSALTheDisposalAgreementbetweentheComp any,LookersMotors(as Seller )andAllianceAutomotive wasenteredintoon9 August 2016,pursuanttowhichtheSellerhasconditio nallyagreedtosellitsPartsDivisionth ro ughthesaleoftheen Septembe r 2016suchthatAllianceAutomotiveHoldingrep lacedAllianceAutomotiveasthepurchaser( Purchaser ).Allotherterms debtfreeandcashfreebasisatthetimeofCompl etion,subjecttothePartsDivisionretaining sufficientworkingcapitalagreedby thepartiesbyreferencetotheperiodfrom1 :(a)therepaymentof theinter-companydebtofapproximately million(excludingVAT)arisingonthetransfe rtothePartsDivisionatcurrentnetbookvalue ofthreerealestatepropertiescurrentlyowne dby BollingInvestments(a whollyownedsubsidiaryof theCompany)andwhichar e currentlyleasedtothePartsDivision;(b)a balancingpaymentof approximately (whichincludesa paymentof approximately 3millionin respect of surpluscashin theSaleCompany)in respectof theequityvalueof theSa leCompany.

10 And(c)paymentofa dailysumof 32,812tobepaidforeachBusinessDayfrom1 July2016to(butexcluding)thedateof Completionasanin terest paymentunderthelockedboxmechanismpayable bythePurchasertotheSellerat ,thePartsDi visionwillhavenodebt andnocash,saveforcashordebtin thePartsDivisionin accordancewithmaintaininga notsubjecttoanyfin conditionalupon(i)deliverybyLo okersMotorsoftheagreedformpropertytransf ersdulyexecutedby BollingInvestmentstotherelevanttransfere es;(ii)mergercontrolclearancebeinggivenb ytheEuropeanCommiss ion,oranycompetentauthorityofoneormore MemberStatestowhomtheEuropeanCommissionr efers theDisposal;and(iii)theapproval oftheShareholdersat Davis,themanagingdirectorof thePartsDivisionanda Di rectorwillresignfromhispositionasanemplo yeeoftheCompanyandasa DirectorandTerenceWainwrightwhois alsoa (2)(j)LR (2)(c)LR (2)(a)LR (1)LR (3)LR (2)(2)Profitfromoperationsbeforeamortisa tion,sharebasedpayments,impairmentofgood willandexceptionalitems7 Furtherdetailsofth e DisposalAgreementaresetou t inPartIII(P ri ncipal Ter ms and Conditi ons of theDi spo sal).