CAR dealership Lookers yesterday offered £492m in the takeover race for its North-East rival Reg Vardy.

The offer trumped a £450m bid tabled by market leader Pendragon before Christmas and will net the Vardy family £137.8m.

Lookers is hoping to double in size by acquiring Sunderland-based Vardy's 102 sites to add to its network of 93 showrooms.

Lookers said the deal was compelling because it was strong in the North-West of England and Northern Ireland, while Reg Vardy was focused on Scotland, the North-East and the Midlands.

The acquisition also brought Lookers together with Ford and BMW, meaning it will now represent manufacturers that cover 92 per cent of the new-car market in the UK.

Chief executive Ken Surgenor said more than a quarter of Vardy shareholders had signalled their intention to support the deal, which will take a couple of months to complete.

In addition, Sir Peter Vardy had agreed not to vote against the takeover, even though he has committed himself to supporting the Pendragon bid.

Reg Vardy was named after its founder, who began a haulage business in Houghton-le-Spring, Wearside, in the 1920s, and later moved into selling cars.

Mr Surgenor said an agreement had been struck with Sir Peter - the son of the founder - to help ensure a smooth transition once the takeover went through.

He said the deal was about "growth opportunities for the much-enlarged business, not cost savings", although Lookers would eliminate duplicated roles.

"Our strategy has been focused on used-car business, after-sales service and prestige brands - and the Vardy deal gives us all three in one go," he added.

Pendragon started the takeover race in November when it lined up Vardy as a target after the benefits of its £230m deal for CD Bramall, in 2004, shielded it from a slowdown in the car industry. This prompted Lookers to reveal that it was also considering a bid, although details of how much it was prepared to pay only emerged today.

Investors showed their approval of the deal as Lookers shares rose two per cent - although there was disappointment among Pendragon investors as shares in the Nottingham-based dealership fell six per cent.

But signs that investors believe Pendragon may return with a higher bid were evident in a rise of more than seven per cent in the Vardy share price to 885p - above the 875p Lookers has agreed to pay