Car dealer Lookers has successfully fought off the £259m hostile takeover bid from its larger rival Pendragon. Following the dramatic intervention of motor trader Tony Bramall this week, Pendragon received acceptances of only 21% of the shares by yesterday's closing deadline and the offer has now lapsed.

Pendragon chairman Sir Nigel Rudd said: "We are naturally disappointed at this outcome as we remain of the view that the offer was compelling and represented a full and fair price for Lookers shares." He added: "Pendragon has many other opportunities to build on its existing position as the No 1 motor retail group in the UK."

Lookers' independence was effectively secured on Tuesday when it won the support of veteran trader Mr Bramall. He bought up the 24.4% stake in Lookers owned by GE and announced he would not accept the Pendragon deal.

A jubilant Ken Surgenor, chief executive of Lookers, said: "Shareholders have recognised the growth potential of Lookers and rejected Pendragon's offer. We appreciate their support ... We can now fully focus on delivering continued out-performance in what is a very dynamic sector." Lookers shares rose 17.5p to 695p while Pendragon added 2p to 595p.

The failure of the bid ends a hectic few months for the quoted motor trade. Pendragon launched its offer for Lookers weeks after clinching the £500m-plus takeover of Reg Vardy. At one stage, Pendragon had proposed a three-way merger.