Republic-Toyota Pact May End Dealerships Dispute

Republic Industries Inc. and Toyota on Monday reached a tentative resolution in a dispute over a buying spree of car dealerships by billionaire H. Wayne Huizenga’s company.

Republic and Toyota issued a joint statement after a meeting in Dallas, saying they reached a deal that will help the companies avoid a court battle.

Republic Vice President Jim Donahue said the companies are working on finalizing an agreement “that would define certain perimeters that Republic could operate within as it relates to Toyota.”

Neither side would divulge details, saying the companies agreed not make separate statements about the pact. A time frame for reaching a final agreement wasn’t disclosed.

Republic has bought 108 dealerships in less than nine months, making it the nation’s largest new-car retailer. But Japan’s largest auto maker sued Republic in several states to protect limits on how many Toyota dealerships one individual or company can own.

Honda, which has a similar lawsuit pending in federal court, on Monday sought a court injunction to halt an alleged buying spree of its dealerships by Republic.

Toyota and Honda are concerned that Republic will gain too much control over their retail operation, making it able to demand volume discounts or specific types of vehicles.

The dispute has driven down Republic’s stock price because of the uncertainty of various state franchise laws. Republic has insisted it won’t demand discounts and that it was willing to negotiate limits on how many dealerships it will buy.

The Big Three U.S. auto makers have been more supportive of Republic’s expansion plans, partly because they have far more dealerships in the U.S. than Toyota or Honda.

Republic’s shares gained 25 cents to close at $23.44 on the New York Stock Exchange.