A £109.7 million offer has been made for Dixon Motors.

Royal Bank of Scotland has made the offer for the UK's largest car and motorbike dealer through its Lombard subsidiary.

Dixon, which has dealerships across the city including a £2 million development on Canal Road, announced it was in talks about a cash bid.

The firm supplied the 6,000 vehicles which Direct Line sold last year through its online dealership Jamjar.com. Dixon, which has 94 dealerships across England, employs 4,000 people. The firm, which last year sold 70,000 cars, reported a rise in pre-tax profits, rising 55 per cent to £12.1 million.

Chris Sullivan, managing director of Lombard, said: "We are delighted to have reached agreement with the independent directors of Dixon on the terms of the offer.

"We believe that the acquisition of Dixon is a logical extension for Lombard as one of the leaders in the business finance marketplace."

Donald Driver, chairman of Dixon, added: "The independent directors believe that the offer of 300 pence in cash per Dixon share represents good value for shareholders. This, combined with the benefits of access to Lombard's financial resources, expertise and established client base has led the independent directors to conclude that the proposed transaction is in the best interests of Dixon shareholders, employees and customers."

Paul Dixon, chief executive of Dixon, said: "We have enjoyed a long-standing relationship with the Royal Bank of Scotland and believe the cultural fit between ourselves and Lombard to be excellent and now, with the backing of one of the leading asset finance companies in the UK, we are in prime position for the future."