Championship Auto Racing Teams, Inc. announced yesterday that its board of directors has instructed management to continue negotiating with Open Wheel Racing Series LLC with respect to all terms related to a possible acquisition of Championship.
Last week Championship received a proposal from Open Wheel Racing Series of $0.50 a share for all outstanding shares of the company, which is less than half the share’s current trading price.
Open Wheel Racing Series is a newly formed holding company owned indirectly by a group of investors including Gerald R. Forsythe, Kevin Kalkhoven, Paul Gentilozzi, Carl Russo and Motorock LLC.
Open Wheel Racing Series and the group of investors currently have beneficial ownership of 3,377,400 shares of CART common stock, all of which shares are held by Forsythe or entities owned or controlled by him. Such shares constitute approximately 22.9% of the outstanding shares of CART common stock. CART previously amended its shareholder rights agreement to provide that the formation of a group that makes an acquisition proposal at the invitation of CART, such as this group that made the proposal received by CART, will not be covered by the shareholder rights agreement unless CART has advised such group that it no longer wishes to consider a proposal from it.
“At an all day meeting of Championship’s board of directors on Saturday, management was given very clear direction to continue its negotiations with Open Wheel Racing Series and seek to conclude those negotiations as quickly as possible so that everyone clearly understands the future direction of the company” stated Championship’s president and CEO Christopher R. Pook.
There cannot be any assurance that the discussions with the group of investors described above will result in any transaction or as to the terms and conditions of any transaction that may be proposed to or pursued by Championship, including whether the terms and conditions of any such proposal will be materially improved from the terms of the proposal already received by CART.
As previously announced, Championship has retained the investment banking firm of Bear, Stearns & Co. to assist it in exploring the availability of needed financing and other strategic alternatives. A copy of the proposal received by Championship is available from the SEC in a filing made by the group of investors described above and is also available by Championship in its filings with the SEC.
Have your say: