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well now look at this news- from Autoweek.com (oddly updated daily)
16:59 Sep. 17, 2003)
CART deal done but not guaranteed
The CART deal is done. Sort of. What remains is an SEC sign-off and, sometime within 60 days or so, the ultimate vote by shareholders. If a majority of CART’s stockholders approve, the series/sanctioning body could again be a private company controlled by race team owners.
As reported here before the fact, CART’s board of directors has accepted a buyout offer from Open Wheel Racing Series LLC, the company recently formed by CART team owners Gerald Forsythe, Paul Gentilozzi and Kevin Kalkhoven, and Toyota Atlantic team owner Carl Russo, to acquire CART. The final accepted price was up six cents from OWRS’ original offer of 50 cents per share.
While the acceptance went essentially as expected, the official statement announcing the deal had a couple of mild surprises. For the first time, OWRS committed to the format that has been CART’s signature (and to many its primary appeal) for more than two decades. A statement attributed to Kalkhoven and Gentilozzi reads:
“[CART] has millions of people who come to the races and OWRS intends to fulfill its commitment to these fans by keeping [CART] in its current format of ovals, road races and street courses. It is our intention that CART will be the premier open wheel racing series of the Americas. We will also take the opportunity of continuing successful overseas programs such as Surfers Paradise in Australia.”
Under the agreement, CART retains the right to accept a better buyout offer from another entity. In that case, however, OWRS “is entitled to receive a termination fee of $350,000.” Further, OWRS can terminate the buyout agreement for any reason through Sept. 18. Beyond that, the deal is governed by what might be called “the Vannini clause.”
Lines drawn
Apparently in anticipation of a challenge from activist stockholder Jon Vannini (AW, Sept. 15), Open Wheel Racing Series LLC’s offer to buy CART includes several conditions that allow OWRS to bail out. One is a bankruptcy filing on CART’s part. Another is “pending or threatened suits advancing non-frivolous claims that OWRS reasonably believes would not be covered by (CART’s) insurance policies or that seek to prevent consummation of the merger.”
That condition could be aimed directly at Vannini—an investor, securities manager and former Barber Dodge Pro Series competitor with a history of trying to influence companies in which he buys stock with legal threats, lawsuits and proxy fights. Vannini remains one of CART’s largest shareholders, and he has watched his original investment of some $15 million tumble in value to a few hundred thousand as CART’s share price has tanked.
Vannini has chosen not to speak with AutoWeek, but it’s clear that since the course of the proposed buyout became clear, CART management has been anticipating a lawsuit from the investor. Vannini has not made his intentions clear. Any action on his part might try to recoup his original investment or give Vannini some active role in CART’s future. The California resident has publicly said, “In my judgment, this buyout proposal is pure fantasy. I simply don’t see the majority of shareholders voting in favor of this deal. I know I certainly won’t. What’s more, it seems highly unlikely to me that all, or even most, of the conditions that they [OWRS] have placed on this deal will be met.”
What’s also clear is that Vannini and OWRS, embodied by team owners Forsythe, Gentilozzi and Kalkhoven, are no longer talking, and indications suggest OWRS has no intention of settling with Vannini.
Under CART’s acceptance of OWRS’ buyout offer, any hostile action on Vannini’s part is reason enough to kill the deal, and could, finally, bury CART.
i don't like how much power Vannini is ultimatley in posses of, he sounds like a slimy money grubber, who might ruin everything, especially if Tony George wants to pay him to do so
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