Politis in driver’s seat for AP Eagers car yard merger

A $2.3 billion merger has cemented Nick Politis’s status as Australia’s car sales king.

Russell Fairfax with Roosters chairman Nick Politis and Blake Ferguson. Picture: Gregg Porteous

It is the $2.3 billion merger that cements Nick Politis’s status as Australia’s car sales king.

The Australian Competition & Consumer Commission gave the green light yesterday for the merger of listed car dealership AP Eagers and Automotive Holdings Group, with Politis a driving force behind the deal.

Already a 38 per cent shareholder in AP Eagers and a non-executive director in the company since 2000, Politis will emerge with a stake in the combined group of about 27.44 per cent, according to merger paperwork lodged with the ASX at the time the deal was announced in April.

AP Eagers shares have since risen sharply in expectation of the deal being approved by the corporate regulator, with Politis — whose fortune was estimated at $1.52bn on The List — Australia’s Richest 250 in late March — now holding shares worth $720 million.

That stake has increased by about $300m since January 1, with AP Eagers shares up about 72 per cent in that time.

It gives Politis a big say in a business that will have a market share of 11.9 per cent across the Australian car sales sector with 226 dealerships in its portfolio.

But Politis also has a huge privately held car dealership empire, one which has as much property on its balance sheet as AP Eagers and is almost as profitable as AHG.

Exact details of the wider Politis empire have always been closely guarded, but recently lodged financial accounts have shed some light on assets that could be worth more than $1bn alone.

The 2018 financial accounts for his NGP Investments, lodged due to a new “significant global entity” requirement under which large private companies that have previously not lodged an annual report can now do so if requested, show an entity with almost $2bn in annual revenue and pre-tax profits exceeding $100m.

Politis, perhaps best known for the City Ford dealership that first sponsored his beloved Sydney Roosters rugby league club in 1976, owns dealerships — and the land on which they sit — via his WFM Motors business, which has up to 30 car yards around Australia.

His portfolio includes seven dealerships bought from South African firm Barloworld for $130m in 2014.

The Politis private balance sheet has more than $700m in net assets, including $295m of land and buildings — comparable to the $332m on AP Eagers’ books.

NPG Investments recorded profit before tax of $103m in 2018 and a net profit of almost $80m, though excluding his share of AP Eagers’ profit on the balance sheet, Politis’s group made $67m for the year.

It still means that business could be worth a cool $1.2bn alone if using the high price-to-earnings multiple of about 19 that AP Eagers, and the S&P/ASX 200, is currently trading at.

All of it gives Politis a big say in the car market, along with the power he already wields as the long-time chairman of the Roosters, the NRL’s defending champion.

The AP Eagers and AHG deal is also a good one for another member of The List in Neville Bertalli, the chairman and majority owner of Melbourne car dealer Patterson Cheney.

While he has a private business with 13 dealerships, Bertalli holds has about $110m worth of shares in AP Eagers.

He also has a $180m stake in logistics company Qube.