Citing coronavirus' impact, Asbury Auto cancels Park Place purchase
Asbury Automotive Group disclosed Wednesday it terminated its planned $1 billion purchase of Park Place Dealerships, paying a $10 million breakup fee rather than follow through with the acquisition, scheduled to close at month’s end. The company said earlier in the month it was reconsidering the purchase because of a disruption to its business caused by the coronavirus pandemic.
“We will continue to do what we have done best for the past 33 years,” Ken Schnitzer, founder and chairman of Park Place Dealerships, said in a separate release. “Now more than ever, we remain committed to creating exceptional experiences for our clients, relying on the talent within our organization, and most importantly, keeping everyone safe.”
Asbury, based in Georgia, announced the termination of the deal in a federal securities filing. The company said it incurred $1.7 million in expenses related to the transaction in 2019. It also said it would pay $19.2 million in premium, fees and expenses related to the March 4 redemption of $600 million of debt notes due in 2024.
Asbury Automotive, in a March 16 securities filing, signaled it might terminate the deal. The company said then it would incur about $30 million in charges if it cancelled the purchase, announced in December.
“We expect to experience some level of disruption, however, the COVID-19 outbreak in the United States remains in its early stages, and we cannot predict the potential future effects of the outbreak on the company’s business or its prospects,” the company said in the filing. “In light of these developments, the company and its board of directors intends to continue to evaluate its alternatives with respect to the previously announced acquisition of substantially all of the assets of the business of the Park Place Dealership family of entities.”
The deal announced was to include the Park Place brand and the Mercedes-Benz stores in Dallas, Fort Worth and Arlington; Lexus Plano and Lexus Grapevine; Jaguar Land Rover DFW; Jaguar Land Rover North Austin; Porsche Dallas; Volvo; Bentley Dallas; Rolls-Royce Motor Cars Dallas; McLaren Dallas; and Maserati Dallas. Park Place BodyWerks in Dallas was also to be included .
Schnitzer founded Park Place Dealerships in 1987 with one Mercedes-Benz dealership on Oak Lawn Avenue in Dallas.
Park Place Dealerships employs more than 2,100 members and operates 18 full-service dealerships.
