Park Place Dealerships held an event to unveil the Porsche Taycan on February 18, 2020. Credit Park Place Dealerships.
You know what they say about timing. In the wake of the growing COVID-19 outbreak, Asbury will not move forward with its purchase of Texas-based Park Place Dealerships. The $1 billion dollar deal was supposed to close next week, but Asbury, in an SEC filing
, has terminated the deal days before it was to close.
The deal involved buying most of the dealerships under the luxury Park Place Dealerships, a moniker owned by Ken Schnitzer. Asbury, a publicly traded company, says it will pay $10 million in damages for terminating the deal.
Schnitzer released a statement Wednesday morning saying:
“We will continue to do what we have done best for the past 33 years,” said Ken Schnitzer. “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.” - Ken Schnitzer, Park Place Dealerships. “Our members continue to show resilience and compassion during this difficult time and we will overcome the challenges we are experiencing as a team.”
While no specific reason was given, Asbury also disclosed in the filing that it is stocking up on cash, borrowing $237 million from a revolving credit line and $110 million from its used-vehicle floorplan loan.
"The company increased its borrowing as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak," Asbury said in the filing
The deal’s demise isn’t surprising given the current state of what’s happening to the U.S. economy, and how it’s impacting Asbury stock. According to Automotive News
, stocks as of Tuesday were down 42.5 percent from the closing price of $93.02 on March 2nd. Even a record day Tuesday and surge of 11 percent to $59.31 in early trading on Wednesday was not enough to save the deal.
The Asbury-Park Place deal was expected to be one of the largest buy-sell deals in at least a decade. Announced last December, it was to include Park Place 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 slated to be included in the sale.
Park Place Dealerships are among CarProUSA’s Certified Dealer Network. Host of the Car Pro Show Jerry Reynolds welcomed Ken Schnitzer on the live broadcast during the Park Place Luxury and Supercar Showcase held back on September 28, 2019. You can listen in here:
Park Place Dealerships employs more than 2,100 members and operates 18 full-service dealerships representing luxury brands Lexus, Mercedes-Benz, Porsche, Volvo, Jaguar, Land Rover, Koenigsegg, Rolls-Royce, Bentley, McLaren, and Maserati. For more info, visit parkplace.com
Park Place No Contact Delivery: