Manheim Auction Inc.'s bid to purchase ADT Automotive Inc. has fueled a war of words between Manheim and rival Adesa Corp.
Adesa CEO Jim Hallett said Manheim's proposal to purchase ADT violates antitrust laws and should be blocked by the Federal Trade Commission. Hallett said Adesa is sharing that opinion with the FTC.
Manheim CEO Dennis Berry said Adesa's position is sour grapes. Berry said Adesa is opposing the acquisition because Manheim refused to allow Adesa to purchase some ADT auctions as part of Manheim's deal with ADT's parent company, Tyco International Ltd. of Hamilton, Bermuda.
'We have been disappointed in recent days to learn that Adesa is calling our customers, the news media and probably the Federal Trade Commission characterizing our acquisition of ADT as bad for the industry,' Berry said.
'We trust they are also telling everyone of their willingness to have a different point of view had Manheim been willing to succumb to their request.'
NO CHANGE OF HEART
Hallett said Adesa's point of view has not changed.
He said Adesa, which also was interested in purchasing ADT, identified several markets where it believes that Manheim would have a business monopoly if the purchase were approved. That, Hallett said, could prevent FTC approval of the deal.
At a Jan. 28 meeting with Manheim in Atlanta, Hallett and Ed Russell, CEO of Adesa parent company Minnesota Power Inc., offered to buy ADT auctions in at least nine markets, Hallett and Berry said. The offer was rejected the following week.
Berry said that he, Manheim COO Darryl Ceccoli and Dean Eisner, vice president of business development at Cox Enterprises Inc., were at the meeting. Attorneys for both sides also attended the meeting. Cox owns Manheim.
'This is not blackmail or a threat; it's business,' Hallett said. 'Adesa will not make the determination. The FTC will make the determination. All we can do is supply information.'
On Jan. 14, Manheim announced it had agreed to purchase ADT for $1 billion in cash.
If the deal is approved, Manheim, which is already the biggest wholesale auction chain, would grow even bigger. It operates 67 auctions in the United States and 28 in Australia, Canada, Puerto Rico, France and the United Kingdom. ADT's 28 auctions would bring Manheim's total to 123.
Adesa owns 29 auctions in the United States and Canada and plans to open four more by June. The new auctions will be in San Diego; Los Angeles; Concord, Mass.; and Calgary, Alberta.
According to Adesa, markets where Manheim might have a monopoly include: Detroit; Seattle; New Mexico/Arizona; central Florida; Minneapolis; Denver; Atlanta; Nashville, Tenn.; eastern Pennsylvania; northern Virginia/Maryland; Kansas City, Kan./Kansas City, Mo.; and San Francisco.
The FTC would neither confirm nor deny that it is reviewing the proposed purchase.