FL-based Int'l Speedway Corp. (ISC) is "buying" 12.2
million outstanding shares of MI-based Penske Motorsports
Inc. (PMI) for $50 per share in stock and cash, according to
Bill Koenig of the INDIANAPOLIS STAR-NEWS, who puts the
value of the deal at $700M. ISC, which "already held" a 12%
interest in PMI, will assume $50M in debt as part of the
transaction. The merger gives ISC control of 10 race tracks
-- with more "on the way" -- compared with NC-based Speedway
Motorsports' (SMI) six (INDIANAPOLIS STAR-NEWS, 5/11). In
the deal, ISC acquired PMI-owned Nazareth Speedway in
Nazareth, PA; MI Speedway in Brooklyn, MI; CA Speedway in
San Bernadino County, CA; NC Speedway in Rockingham, NC, and
PMI's 45% interest in the Miami-Dade Speedway in FL, 90% of
which is now owned by ISC (ISC). In Philadelphia, Bill
Fleischman adds that the total transaction value is
"approximately" $705M, but he puts the "net value" of the
deal at $623M (PHILA. DAILY NEWS, 5/11). In Daytona, Godwin
Kelly puts the "estimated" value of the deal at $705M
(Daytona NEWS-JOURNAL, 5/11). In Detroit, Steve Crowe writes
that the deal "does not involve" Penske's CART operation or
the Penske South NASCAR Winston Cup team. Combined revenue
for the two companies in '98 was $306M, with ISC generating
$189M. The transaction must be approved by PMI stockholders
(DETROIT NEWS, 5/11). In NASDAQ trading yesterday, ISC rose
$2 to $49.875, while Penske "surged" $4.375 to $43.125 with
news of the deal (WALL STREET JOURNAL, 5/11).
THE NEW COMPANY: ISC Exec VP Lesa Kennedy said that
"right now everybody will continue in their current roles"
(Daytona NEWS-JOURNAL, 5/11). In Charlotte, David Poole
reports that Roger Penske will become Vice Chair of the ISC
Board of Directors, which will "be expanded" to also include
PMI President & CEO Greg Penske, Roger's son, and PMI Vice
Chair Walt Czarnecki. ISC Chair & CEO Bill France, Jr. will
remain in his current position (CHAR. OBSERVER, 5/11).
Other Penske personnel will be offered management positions
within the newly-formed partnership (USA TODAY, 5/11).
ISC/PMI IMPACT: In Daytona, Godwin Kelly writes that
ISC is "the undisputed superpower" of motorsports, as its
"empire ... now stretches from the Miami area to Los
Angeles." ISC VP Lesa Kennedy: "This expands ISC's presence
in four significant media markets and that is going to be
very important to us" (Daytona NEWS-JOURNAL, 5/11). In
Indianapolis, Bill Koenig writes that the newly-formed
"combined entity" will control many of "auto-racing's
biggest and most prominent tracks." NationsBanc Montgomery
Securities analyst Chris Hansen added that ISC now "will
have a better, stronger hold on sponsors wanting to sponsor
races or have a presence at race tracks." Meanwhile, SMI VP
& General Counsel Lauri Wilks said that SMI execs "haven't
had the opportunity to get into the deal because it's just
been announced," but added, "I don't think this is a big
surprise. ... Really, this is just further consolidation in
the industry" (INDIANAPOLIS STAR-NEWS, 5/11). On CNBC's
"The Edge," Joe Kernan reported that the company will become
"the nation's largest provider of motorsports entertainment
and it will be a giant" (CNBC, 5/10). ISC will now host 14
Winston Cup dates (DALLAS MORNING NEWS, 5/11).
