Asbury Automotive Group Inc. will get another crack at buying San Diego megadealer Bob Baker's six-store chain.
The sale of Bob Baker Automotive Group would give publicly held Asbury, the nation's fifth-largest dealership group, another $400 million in annual revenues. But the deal was ready to collapse after Ford Motor Co. last year rejected Asbury as a buyer of Baker's University Ford store.
Bob Baker initially refused to break up his 10-franchise dealership group but recently changed his mind.
"I'm ticked off at Ford," Baker says. "I got a raw deal." He says he's willing to exclude the Ford store from the deal and will sell the rest of the chain to Asbury. Baker says he will offer the Asbury Group an option to buy University Ford, giving Asbury, of Stamford, Conn., time to work out its differences with Ford.
The giant public retailer last year agreed to buy Baker's dealerships for $88 million. But Ford said Asbury needed to increase sales and customer satisfaction scores at some of the Ford dealerships it owns before buying more Ford stores. Asbury owns seven Ford dealerships.
Asbury officials were unavailable for comment last week.
Asbury's sales in the first half of 2003 were $1.2 billion, 9 percent above the same period last year. The group is No. 5 on the Automotive News list of the top 100 dealership groups in the United States based on 2002 new-vehicle retail sales of 96,000 units.
Meanwhile, a recent California court decision may improve Baker's chances of overcoming Ford's objections to the sale.
In July, Baker lost a case before the California New Motor Vehicle Board in which he argued that Ford's rejection of Asbury was unreasonable. But earlier this month a California appeals court ruled the board does not have the authority to decide disputes between manufacturers and dealers over the transfer of a dealership.
Baker says he may try to use the case as a precedent in an effort to get a state court to overturn the California board's decision.