Lookers has announced a large acquisition this morning, buying Benfield Motors for £87.5m in cash. This transaction will be immediately earnings enhancing, and we anticipate upgrading current year forecasts by c4-5% and next year by c12.5%+. With the MD of the Motor Division having previously run Benfield, confidence in the integration plan and future synergies is high. We would therefore expect to upgrade our target price by an amount comparable to next year’s upgrade, i.e. to around 200p+. This is an excellent transaction and the shares should respond accordingly. We reiterate our BUY stance on the stock and will review forecasts and target price in due course.