CATS OUT OF THE BAG: HUIZENGA STOCK STRATEGY MAKES WAVES
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).