MOTOR dealer Lookers yesterday reported a record year days after rejecting a £258m hostile bid by rival Pendragon on the grounds that it was too low.

Lookers said pre-tax profits were up 28 per cent to £18m while turnover was up 13 per cent to £1.23bn - helped by buoyant sales of used cars and the strength of its business model.

Chief executive Ken Surgenor said: "It is ironic that at a time when Lookers is the subject of a bid which represents significant under value for Lookers shareholders, the board announces another record year with its strongest ever set of results."

Lookers' board unanimously rejected the 725p a share offer from Pendragon, Britain's biggest car dealer, saying it significantly undervalued the company.

Pendragon's all-share proposal came after Pendragon had proposed taking control of both Lookers and Britain's second-largest car dealer, Reg Vardy, in a three-way deal.

Lookers said a bid coming so soon after the move on Sunderland-based Reg Vardy would "involve major operational risk", and likely a high degree of commercial risk.

The company operates a network of more than 100 dealerships in the UK, including in Darlington and Middlesbrough.