Dover Motorsports, Inc. Announces Intention to Commence Tender Offer to Repurchase Up to 10% of Its Common Stock and Class A Com
August 05 2005 - 10:40AM
PR Newswire (US)
DOVER, Del., Aug. 5 /PRNewswire-FirstCall/ -- Dover Motorsports,
Inc. (NYSE:DVD), today announced that its Board of Directors has
authorized the Company to commence a tender offer to purchase up to
1,706,543 shares of its Common Stock and up to 2,323,019 shares of
its Class A Common Stock at a fixed price of $7.00 per share. The
number of shares proposed to be purchased in the tender offer
represents approximately 10% of the Company's total shares
outstanding. Based on the closing price per share of the Company's
Common Stock on the New York Stock Exchange on August 4, 2005 of
$5.86 per share, the offer represents a premium of 19%. If the
offer commences, as expected, on Wednesday, August 10, 2005, then
the offer and withdrawal rights would expire at 5:00 P.M., New York
City time, on Thursday, September 8, 2005, unless extended. The
Company expects to pay for tendered shares with available cash on
hand and amounts borrowed under the Company's unsecured revolving
credit facility, as recently amended. Commenting on the
announcement, Denis McGlynn, the Company's President and Chief
Executive Officer, noted, "We believe that a share repurchase
effected by the offer announced today is consistent with our
long-term goal of maximizing stockholder value. This flows from our
belief that the repurchase of our shares is currently a prudent use
of our funds. The tender offer affords us the opportunity to return
cash to stockholders who elect to tender their shares at a premium
over recent trading prices without the usual transaction costs
associated with open market sales, while at the same time
increasing non-tendering stockholders' proportionate interest in
our Company and thus in our future earnings and assets at no
additional cost to them." If holders of more than 1,706,543 shares
of Common Stock or 2,323,019 shares of Class A Common Stock
properly tender and do not withdraw their shares, then the Company
will purchase shares so tendered by those stockholders owning fewer
than 100 shares who tender all of their shares without proration,
and all other shares will be purchased on a pro rata basis by
class, subject to the conditional tender offer provisions that will
be described in the offer to purchase to be distributed to
stockholders. Stockholders whose shares are purchased in the offer
will be paid the purchase price in cash, without interest, after
the expiration of the offer period. The offer is not contingent
upon any minimum number of shares being tendered. The offer is
subject, however, to a number of other terms and conditions to be
specified in the offer to purchase to be distributed to
stockholders. No brokerage fees or commissions will be charged to
holders of record who tender their shares directly to the
Depositary. Holders who tender their shares through a broker,
dealer or custodian may be required by such entity to pay a service
charge or other fee. The tender offer is not subject to any
financing contingency. In conjunction with this announcement, the
Company has entered into an amendment of its revolving credit
facility with Mercantile-Safe Deposit and Trust Company, as agent,
and various other lenders. The amendment provides for more
favorable pricing to the Company, changes the credit agreement from
a secured to an unsecured facility, extends the term of the
facility for three years, and increases the credit line to $70
million. The Company's directors and executive officers have
advised the Company that they do not intend to tender any shares of
Common Stock or Class A Common Stock in the offer. The Company has
been advised that the Estate of John W. Rollins intends to tender
2,311,960 shares of Class A Common Stock, representing
approximately 22.4% of its Class A holdings. Excluding the holdings
of the Estate, the majority of the Company's Class A Common Stock
is held by directors, executive officers and members of their
respective families. The Company has been advised that these
holders do not intend to participate in the offering. The Dealer
Manager for the tender offer will be Raymond James &
Associates, Inc. Mellon Investor Services LLC will act as the
Information Agent and Depositary. This release contains or may
contain forward-looking statements based on management's beliefs
and assumptions. Such statements are subject to various risks and
uncertainties that could cause results to vary materially. Please
refer to the Company's SEC filings for a discussion of such
factors. Dover Motorsports, Inc. is a leading promoter of
motorsports events in the United States. Its motorsports
subsidiaries operate four motorsports tracks in three states and
promote motorsports events under the auspices of three of the
premier sanctioning bodies in motorsports - NASCAR, IRL and NHRA.
The Company owns and operates Dover International Speedway in
Dover, Delaware; Nashville Superspeedway near Nashville, Tennessee;
Gateway International Raceway near St. Louis, Missouri; and Memphis
Motorsports Park in Memphis, Tennessee. This press release is for
informational purpose only and is not an offer to buy or the
solicitation of an offer to sell any shares of the Company's Common
Stock or Class A Common Stock. The solicitation of offers to buy
Dover Motorsports' Common Stock and Class A Common Stock will only
be made pursuant to the Offer to Purchase and related materials
that the Company is sending to its stockholders. Stockholders
should read those materials carefully because they will contain
important information, including the various terms and conditions
of the offer. Stockholders will be able to obtain copies of the
Offer to Purchase, related materials filed by the Company as part
of the statement on Schedule TO and other documents filed with the
Securities and Exchange Commission through the Commission's
Internet address at http://www.sec.gov/ without charge.
Stockholders will also be able to obtain copies of the Offer to
Purchase and related materials, as filed with the Commission
(excluding exhibits), without charge from the Company or by written
or oral request directed to the Information Agent, Mellon Investor
Services LLC, 85 Challenger Road, Ridgefield Park, New Jersey
07660, telephone number 1-866-293-6625. DATASOURCE: Dover
Motorsports, Inc. CONTACT: Patrick J. Bagley, Senior Vice
President-Finance and Chief Financial Officer, Dover Motorsports,
+1-302-857-3745 Web site: http://www.dovermotorsportsinc.com/
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