Now this is the way to run money!!!!!!

AutoNation, Inc. (NYSE: AN - News), America's largest automotive retailer, announced today that it intends to commence a cash tender offer to purchase up to 50 million shares of its common stock at a price per share of $23. The number of shares proposed to be purchased in the offer represents approximately 19% of the Company's currently outstanding shares. The tender price represents a 10% premium over the closing price of the Company's common stock on the New York Stock Exchange of $20.89 per share on March 6, 2006, the last trading day prior to the announcement.

Mike Jackson, the Company's Chairman and Chief Executive Officer, stated,"The tender offer for our common stock demonstrates our confidence in the future of AutoNation. The transaction will allow us to deliver stockholder value while retaining financial flexibility to take advantage of future opportunities."

AutoNation expects to commence the offer by no later than March 10, 2006.

Ohhh but wait there is more:

ESL Investments, Inc., which owns 77,061,800 shares, or 29%, of the Company's common stock, has agreed to tender all of its shares in the offer. Two of the Company's directors, Edward S. Lampert and William C. Crowley, are Chief Executive Officer and President and Chief Operating Officer, respectively, of ESL Investments, Inc.


Let me simplify what you just read. Eddie Lampert has decided that Auto Nation needs to issue $900 million in debt to purchase his shares back from him. Just so we are clear on this he is taking shareholder dollars (of which he is one) and dispersing this back to shrink the float. Now I am not an expert on this subject but to me its seems like this: Eddie's hedge fund is struggling with investments in SHLD, AZO and AN so in an attempt to get his numbers up this year he is essentially strong arming the company to pay a 10% premium to buy back his shares. Sure this is good for people holding the stock, hell if I owned it I would sell it all right here. Basically because you only get pro-rata for the number of shares you own and since Eddie owns 29% you aren't gonna get to sell all that much. But I would also sell it now because this is an artificial move to make a stock go higher. My money is that this stock heads right back down south after Eddie dumps 25 million shares right back onto the company. Only now the company has triple the debt. I really wish I had enough money to push these companies around like Eddie. I guess that's one way to make money in the market...

Anyone want to make a bet that he ends up in jail sometime in the next 20 years...just a thought.

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