Larko looking for Investors...

[GTRMagic]

From RaceNews:

Larkham Motor Sport
Mar 24 2005
Larkham Motor Sport Seek Investment to take Team to the Highest Level


As the business of V8 Supercar racing continues to grow, Mark Larkham has taken the initiative to seek investors to take a significant shareholding in its fully operational racing business, in a move that is intended to take this continually developing team to the next level.

Larkham and his dedicated team of personnel have built the LMS business to become a competitive force in V8 Supercar, running two Level One cars and finishing 2004 as the second best performing Ford Team in the Championship.

In detailing his plan Larkham said, “This decision is the result of much consideration, planning and analysis of what is the best road map forward for this team. LMS has never been stronger as a team, better sponsored or more financially secure, and as such the timing is right. This is an attractive proposition for the right party”

“If I can add a little commercial clout to what is an intelligent, dedicated and hungry bunch of racing people, this team will become a winner. Fact is, the sport has taken a direction that will require this strategic positioning of the business. I will not see the work put in place to create this great team and racing culture, not given the opportunity to exploit its real potential.”

Whilst the intention is to attract investment into the Level One Licenses and Team as a ‘walk up’ fully operational racing business including cars, equipment, sponsors, drivers, operations, personnel and IP, Larkham’s intent is to stay on board, and would consider staying as a partner, or in fact continuing LMS’s current momentum without change if a suitable investor was not identified.

“I must be clear, I have no desire at all to leave the business, this is what I do. This is about offering someone the opportunity to tap into everything we have in place, and take it to the next level. It has taken 19 years to get to this point and I very much want to be part of the fulfilling a deep desire to see this team as a Championship contender. I am not looking to get out and buy a Hardware store or similar”. Larkham said.

“We have worked hard to assemble what I often boast is the best ‘team of people’ in the Championship. This is about providing better access to success, and finding a commercial investor to share the vision and take this thing forward.”

"LMS is often labeled as ”the team with potential,” in a nutshell, I am now looking for someone, or a strategic partner who can play a role in realising that potential”.

Larkham will be moving forward on his plan with the full support of his team and sponsors.

Remember another thread here suggesting some teams were re-evaluating their structures, and places in the sport....

[pete55]

Does the 'sport' of V8 Supercar have such a rosy future (i'm talking 10 years+) to make it attractive to strategic partners. Partners such as is required here want such an assurance.

[GTRMagic]

The way I see it... that Supercar may not exist in its present form forever... but if you build the infrastructure in such a way that the team has engineering skills that are translatable to other categories, the team will be well placed to take up opportunities in those other categories as and when they arise.

We saw that when Group C become Group A, the same guys did the job at the front, and from Group A to Supercar it was the same engineering talents that helped particular drivers be successful in each category....

I think this move is pretty ballsy... instead of trying to find a solution behind closed doors, and allowing idle speculation, Larko has been totally up front and open... and will perhaps tickle some funds out of the woodwork...

From some other threads here, it seems there are other commercial sponsors and sponsor procurers around looking for the best deals and opportunities for their customers... so Larko may find a willing participant sooner rather than later.

[billy bigtime]

He should float in on the market as HRT should have been. I'd buy a share and become a LMS supporter.

[stoned pony]

And what return on investment would you expect? I think I'd rather have shares in BHP.

[GTRMagic]

Originally Posted by billy bigtime

He should float in on the market as HRT should have been. I'd buy a share and become a LMS supporter.

There were a couple of investment groups seriously looking at HRT when they had their franchise and ownership troubles... it was only Holden telling them that the solution was sorted that stopped a private equity firm being the controlling shareholder in the team.

The concept of an IPO is attractive, to be able to buy shares in your favourite team... if you listed with a market capitalisation of say $10m for arguments sake, raising say $5m from the public, leaving Larko with the other $5m in shares, then paying approx. $1m in listing costs... it would generate $4m to improve the infrastructure of the team.

But there are ongoing listing costs that need to be considered, including maintaining the share registry, appointing a board and meeting its costs, dividend payments etc etc.

Sounds like a good plan... as a one off.. while the return would be primarily the franchise licence income... say $500k per year, or 5% return on the face value of the investment. And allow Larko a liquid asset to acquire or dispose of...

Quite how you mitigate risk in a racing team when the primary function of that team is to compete against other people, and the possibility of car damage is always there, would be a difficult scenario to write about in a prospectus.

But it could be done....

[billy bigtime]

I've got a lazy 20k to put in and be part owner of a Race Team I think it would be a very popular float. Bugger the return

[Grimace]

and heres a scenario:
wouldnt the share value plunge
if someone with an intresting business background, maybe a foreigner,
joined a popular team, hmmmm it could happen

[GTRMagic]

I was actually thinking whether a particular meglomaniac that seems intent on splashing his brand name all over the ship, may purchase this team to bring their engineering prowess onto the 2 cars they currently run in the series.

And give them access to SBR engines as well...

[Grimace]

Originally Posted by GTRMagic

I was actually thinking whether a particular meglomaniac that seems intent on splashing his brand name all over the ship, may purchase this team to bring their engineering prowess onto the 2 cars they currently run in the series.

And give them access to SBR engines as well...

Mines a bad dream

Yours would be a full NIGHTMARE ...if it occurred

[Just Do It!]

Originally Posted by GTRMagic

I was actually thinking whether a particular meglomaniac that seems intent on splashing his brand name all over the ship, may purchase this team to bring their engineering prowess onto the 2 cars they currently run in the series.

And give them access to SBR engines as well...

And with Ford's blessing? Yeah right, It'd be a very "far cough"....

[cavvy]

GTR, didnt CART float then fail?

Are you aware of any race teams listing anywhere? How about Lotus?

[GTRMagic]

CART floated and failed... but there was enough money in the bank at CART in the year it fell over to last it 10 years in a normal situation. The management team at the time figured that they needed to prop up all manner of racing teams in the final year as a publicly listed company, and burned thru something like $100m in a single season!!

There are no race teams I am aware of that are on the markets around the world by themselves, normally motorsport entities are bundled with conventional businesses (like Cosworth and Vickers used to be..) or RenaultF1 is with the Renault group.

The precedent exists here with the Brisbane Broncos football club, that has a sharemarket representation. This particular stock doesnt do so well because the other sports related businesses wrapped up in the entity are not profitable, and there appears to be little successful strategic intent in being able to make it generate money.

[Just Do It!]

Fiat have talked about floating part or possibly all of the Ferrari F1 team, but I don't know how well received it would be. Plus an F1 team can consume about 6 times their revenue if you give them the chance

[retro]

Toyota - Mitsubishi - Chrysler or ????

[motormad]

The cars are fully sponsord, what possible value could an invester recieve.
As for floating on the stock exchange, thats the stupidest thing I have ever heard, and shows a complete lack of understanding of how these things work.
And thoughs of you so eager to invest the odd lazy 20k in this venture I say to you, that you could,nt possibly have 20k to invest given that sort of business acumen.

[GTRMagic]

Originally Posted by motormad

The cars are fully sponsord, what possible value could an invester recieve.
As for floating on the stock exchange, thats the stupidest thing I have ever heard, and shows a complete lack of understanding of how these things work.
And thoughs of you so eager to invest the odd lazy 20k in this venture I say to you, that you could,nt possibly have 20k to invest given that sort of business acumen.

Nice sentiments you have there motormad.

The requirement as detailed in this press release is to find an investor in the team, a patron, who will invest in capital, and source sponsorship for the continued operation of this enterprise.

The sharemarket listing unlocks value in this team, and is not silly as 2 very large names in that game have been involved in a feasibility exercise recently.

So if you unlock some value, and give the proprietor some cash, as he retains control, and that cash can be spent for the future, as in have a group of commercial people devoted 100% on sponsor chasing, have an engineering crew developing the "next big thing", then ultimately, if you choose the right people, the team will improve both commercially and on the racetrack by stealth.

There are people out there, including some posters on this forum, that have the wherewithall to make this kind of investment happen. You may ask what's in it for them.. as I suggest, the person/enterprise will be a patron, a figurehead, like a Garry Rogers at GRM, a Larry Perkins at TPR, a Mark Larkham at LMS... or dare I say a Craig Gore at WPS....

There are a million ways to skin an orange... if you choose to poo pooh them, and offer nothing better as an option, then you make no meaningful contribution here yourself.

[Just Do It!]

Why skin the orange when you can juice it with the skin on?? But your post is right.

Don't stop dreaming, even if the moon is closer than the stars

[billy bigtime]

Originally Posted by motormad

The cars are fully sponsord, what possible value could an invester recieve.
As for floating on the stock exchange, thats the stupidest thing I have ever heard, and shows a complete lack of understanding of how these things work.
And thoughs of you so eager to invest the odd lazy 20k in this venture I say to you, that you could,nt possibly have 20k to invest given that sort of business acumen.

I make a hansome living through the sharemarket so I know a little bit about it. Ask your boss at McDonalds, he may be able to explain it to you.

[motormad]

Just because I flip burgers for a living dos,nt give you the right to look down on me. At least I have a great girlfriend all you have is your hand you unemployable wa..er.

Originally Posted by billy bigtime

I make a hansome living through the sharemarket so I know a little bit about it. Ask your boss at McDonalds, he may be able to explain it to you.

[Gaz170]

Originally Posted by billy bigtime

I make a hansome living through the sharemarket so I know a little bit about it. Ask your boss at McDonalds, he may be able to explain it to you.

One of the best comebacks I've heard in a long time.

[smokinJ]

i thought motormads comeback was better eh tricky