It's an interesting notion that if and when computer mogul Michael Dell buys Asbury Automotive Group, he might treat the dealerships like laboratories for new-age theories about selling cars.
There are those in the retail world who predict the founder of computer giant Dell might experiment in areas that have worked in the computer business - just-in-time inventory, for example, rather than keeping vehicles on the lot where shoppers can browse.
That doesn't pass the smell test.
Why would you invest heavily in an established business - the sixth-largest U.S. dealership group - and risk losing everything on unproven schemes that fly in the face of U.S. car-buying habits?
MSD Capital LP, a private equity fund that manages the capital of Michael Dell and his family, is interested in acquiring publicly held Asbury and take it private, according to sources in the retail, factory and finance sectors. Asbury went public in March 2002.
A spokesman said MSD doesn't comment on possible investments. Timothy Collins, CEO of Ripplewood Holdings, which owns more than half of Asbury's stock, could not be reached. Asbury Vice President Allen Levenson declined to comment on what he called a rumor.
It could be that Dell and MSD just want to diversify the portfolio with a strong company in an established business that generates healthy cash flow.
Asbury reported net income of $61.1 million for 2005 on revenue of $5.54 billion. Last year the company's 89 dealerships retailed 105,521 new and 60,615 used vehicles. Asbury also rang up 7,262 fleet sales.
Asbury's stock has been trading around $20 a share, which yields a market cap of about $650 million. When you add in blue sky, it pushes the purchase price upward of $750 million, according to one estimate - perhaps a lot more, depending on what it takes to buy out the other shareholders.
That sure seems like too big of a stake to gamble on experiments, even for Michael Dell.
Edward Lapham writes five commentaries each week for autonews.com. You can read them at autonews.com/edwardlapham.