SBD/Issue 44/Finance

As The Wheel Turns: Mystery Fund Acquires 5.8% Of CART Stock

Bermuda-based Gryphon Master Fund notified the SEC that it has acquired 854,400 shares, or 5.8%, of CART's outstanding shares, according to AUTOWEEK. The buy took place "three days before CART announced [Q3] losses of" $34M last month. Dallas-based exec Warren Garden assisted in the accumulation of shares for Gryphon. While no one seems to know "who or what Garden and Gryphon are, or why they might be trying to acquire a chunk of CART," Gryphon "appears to be a hedge fund." There is also the "possibility Gryphon is a front for someone with a larger stake in the proceedings. In itself, Gryphon's 5[%] voting block wouldn't seem enough to influence the buyout [to Open Wheel Racing Series]. But in concert with other blocks of stock, who knows?" The week before Gryphon reached the 5% equity threshold — requiring the report to the SEC — CART stock was trading at $0.42-0.52 per share. With the OWRS buyout offer at $0.56 per share, if Gryphon bought its CART shares at an average of $0.45, it stands to net $94,000 in the buyout if it is approved. But if shareholders representing 16% of CART's ownership (or more) "choose to perfect their appraisal rights, the sale is off" (AUTOWEEK, 11/10 issue).

SALE: CART President & CEO Chris Pook appeared on ESPN2's "Cold Pizza" this morning and said, "We are in the process of selling the company to three individuals who will take the company private. ... These individuals are fairly deep-pocketed, they understand what they are getting into and what they've got to do. The company is being turned around at the same time the sales is going forward" ("Cold Pizza," ESPN2, 11/13).

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