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CATS OUT OF THE BAG: HUIZENGA STOCK STRATEGY MAKES WAVES
Published March 25, 1998
After Panthers Owner Wayne Huizenga took his team public in November '96, his "first move" was the acquisition of two resort hotels owned partly by Huizenga and other team officials, "a move that enriched Huizenga, his friends and others who have invested with him," according to Edward Wyatt of the N.Y. TIMES. The floatation "has all worked out grandly for Huizenga, whose original investment in Florida Panthers Holdings has nearly tripled in value" to $150M. Initial investors "have done well, but many of those who bought subsequently have, at best, broken even," and some "profitable investors who got in early have expressed outrage, believing that Huizenga and his friends profited improperly. Three class-action lawsuits seeking damages have been filed by shareholders" (N.Y. TIMES, 3/25). WAYNE'S WORLD: Wyatt reports that the initial resort deals, "unrelated to the hockey club, sent the price of Panther stock soaring. But despite the sharp increase, the company did not adjust the number of shares it had offered to exchange for the resorts before the deal closed." By "ignoring a common practice when acquisitions are paid for with shares of stock, the company ended up paying" $225M for the two resorts, three times the original price. Wyatt adds that despite the teams' losses, the market value of FL Panthers Holdings "has increased sixfold" since the company went public. Profits from the hockey and arena-management operations, which now account for only about 10% of the company, "will be a blip on the company's financial screen." Wyatt: "For Huizenga, little about Florida Panthers Holdings has to do with hockey" (N.Y. TIMES, 3/25).