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Politis sells Victorian dealerships to Eagers Automotive in $245m deal

Billionaire Nick Politis will become $245m richer after selling his portfolio of Victorian dealerships to Eagers Automotive where he is the largest shareholder.

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Eagers Automotive largest shareholder Nick Politis will pocket $245m after selling his private portfolio of Victorian dealerships and properties to the ASX-listed company.

The portfolio is across Melbourne and the Mornington region and is owned by a group of companies associated with Mr Politis who is an Eagers’ Board member with a 27 per cent stake in the company.

The Eagers’ acquisition will add about $1bn to its annual turnover and 770 employees to the company’s operations, adding significant scale to its Victorian business.

Mr Politis, whose personal fortune is nearing $2.5bn, said the automotive industry was evolving more rapidly than at any time in his career.

“This includes new OEMs (Original Equipment Manufacturer) entering the market, the transition to lower emission cars and trucks and the continued evolution of automotive retail, all of which create great opportunities,” he said.

“I am convinced larger groups, like Eagers, are best placed to navigate these changes, invest with our key OEM partners and grow materially into the future.”

The high quality, well-balanced portfolio includes 12 OEM brand partners – BMW, Jaguar, Land Rover, Mercedes-Benz, MG, Mini, Mitsubishi, Nissan, Renault, Skoda, Volkswagen and Volvo.

The Mercedes-Benz EQE SUV.
The Mercedes-Benz EQE SUV.

The dealerships are at Brighton, Essendon, Mornington, Mulgrave, Port Melbourne and Toorak, complementary to Eagers’ existing operations in Victoria.

The deal also includes the sale of three properties, representing about 53,500sq m in high-profile sites in Brighton and Mulgrave.

Ten of the dealership’s properties will be kept by Mr Politis and other land owners. They will be rented to Eagers on a commercial basis.

Mr Politis will be issued with $25m in Eagers shares as part of the deal, and the $220m remainder of the deal is being paid in cash for goodwill and property.

“With $25m of the purchase price being reinvested in Eagers shares, I personally plan to continue to play an active role as a shareholder and board member of Eagers to help identify and capitalise on the many opportunities ahead,” he said.

In April 2022, Mr Politis struck a similar deal, selling his privately-owned dealerships in the ACT to Eagers for $193m.

Eagers shares were up about 33 per cent since January 1, valuing Mr Politis’ current stake at about $1.01bn.

He owns about $1bn worth of car dealerships he owns privately, as part of a huge business empire that started with his City Ford dealership in Sydney in 1974.

Mr Politis, who is also the Sydney Roosters chairman, also owns several hundred million of property holdings, including many of the sites that his dealerships sit on and office blocks and commercial buildings in NSW and Queensland.

The Victorian transaction is subject to customary conditions precedent including OEM consents, finalisation of due diligence, transaction documentation, finance approval and landlord approvals.

The transaction is also subject to shareholder approval due to the relationship between Mr Politis, an Eagers Automotive and the various selling entities.

Nick Politis’ personal fortune is nearing $2.5bn.
Nick Politis’ personal fortune is nearing $2.5bn.

Eagers Automotive chief executive Keith Thornton said the purchase will add more than 10 per cent to the company’s annual sales.

“It will increase our presence in Melbourne, a region we have previously identified as having significant runway for growth, taking our annual turnover in this region alone from $1.5bn to $2.5bn,” he said.

“Finally, the inclusion of three strategic properties, representing approximately 53,500sq m in high-profile sites in Brighton and Mulgrave, will provide the footprint foundation to continue progress against key components of our Next100 strategy.”

The strategy aims to position the company as a leading automotive retailer, well positioned to capitalise on the ongoing changes in the automotive retail industry.

This year Eagers canned the much heralded AutoMall precinct at the Brisbane Airport that was to have featured a 2.4km test track designed by V8 race car legend Mark Skaife, auto dealerships, exhibition and conference activities, an event area, driver training schools and regional offices.

In its August half year results report to the ASX, Eagers said its network strategy included the AutoMalls as well as lighthouse facilities aimed at early adopter customers, pop up locations, innovative retail formats, traditional dealerships and fulfilment centres.

Eagers has also increased its share of the electric vehicle market, having gained an 80 per cent interest in EV Dealer Group, the exclusive national retail joint venture to sell BYD electric vehicles in Australia.

Earlier this year BYD overtook EV pioneer Tesla as the world’s largest electric vehicle producer by sales. BYD is backed by Warren Buffett’s Berkshire Hathaway.

Eagers closed 9 cents higher at $14.32.

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Original URL: https://www.theaustralian.com.au/business/politis-sells-victorian-dealerships-to-eagers-automotive-in-245m-deal/news-story/d5ced493b2386279bd2e99d3b98e658b