UnitedAuto plans stock buyback

Detroit-based UnitedAuto Group Inc. said Wednesday that it will repurchase up to 3 million shares of its common stock.

UnitedAuto stock has declined from $20 a share before the Sept. 11 terrorist attacks to $13.49 this morning. UnitedAuto had 23.4 million shares of common stock outstanding as of Aug. 9.

UnitedAuto is a chain of 123 car and truck dealerships in the United States, Puerto Rico and Brazil.

Michael Niemira, a retail analyst and vice president of Bank of Tokyo-Mitsubishi Ltd., predicts that the attack and the slowing economy will cause consumers to buy fewer large, expensive items, such as cars.

Still, UnitedAuto's stock is trading at more than twice its 52-week low of $6 Dec. 28.

"We believe the repurchase of our own shares will demonstrate to our investors management's confidence in both the company and the nation's long-term economic strength," Roger Penske, UnitedAuto's chairman, said in a statement.

-- Brent Snavely, Crain's Detroit Business

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