American Honda Motor Co.'s legal challenge to the continuing expansion of Republic Industries comes just as Republic shareholders are about to convene in Fort Lauderdale, Fla., for their annual meeting.
At the meeting, scheduled for Tuesday, May 13, shareholders should have much to be pleased about. In less than a year, Republic has grown from a medium-sized solid-waste company to an auto retail and rental titan.
Republic began 1997 as a $3 billion enterprise. According to CEO H. Wayne Huizenga, the company expects to finish the year with revenue of about $10 billion.
About $9 of every $10 in revenue this year will come from automotive operations, he said.
Republic began buying dealerships early this year by using its stock as currency and has quickly become the largest auto dealer group in the country.
The company now owns 21 dealership groups representing 104 franchises across the country. Its dealerships recorded more than $5 billion in sales in 1996.
Since Huizenga became chairman in 1995, Republic shareholder gatherings have become something like tent revival meetings, with Huizenga in the role of preacher. The meetings sometimes draw several thousand.
This year, shareholders will vote on a proposal to increase the number of authorized shares of common stock from 500 million to 1.5 billion.
The company's stock soared as high as $44 a share this year, but has been hovering in the mid-$20 range recently. The Honda suit appeared not to have much effect. Republic closed Thursday at $27.88, down 38 cents.
At that price, the stock was up 65 percent from its 52-week low of $16.88.
In other developments, Republic last week sold 15 million shares of ADT Ltd. common stock to five institutional investors for $412.5 million. The sale yielded a profit of $112.5 million for Republic. ADT Ltd. is the owner of ADT Automotive, the nation's second-largest auto auction firm. Last summer, Republic tried unsuccessfully to purchase ADT Ltd.
Republic also is poised to open AutoNation USA used-car megastores in Pembroke Pines, Fla., and Canton Township, Mich. The Pembroke Pines store was 'conceived as a Driver's Mart Worldwide, but South Florida megadealer Mike Maroone switched from Driver's Mart to Republic earlier this year.