Sports Properties Acquisition Corp. (“Sports Properties”) (NYSE
Amex: HMR), a public investment vehicle, announced today that it
has signed a framework agreement with Medallion Financial Corp.
(“Medallion”), which sets forth the steps Sports Properties will
take to continue its business as a corporation that acquires,
actively manages and leases taxicab medallions, operates on a
selective basis, the taxicab fleets associated with those
medallions and provides a range of services to the taxi industry.
Sports Properties also intends to strategically seek new business
opportunities in taxi-related operating businesses. The
transactions contemplated by the framework agreement are expected
to be completed prior to January 17, 2010, pending approval by
Sports Properties' stockholders and warrant holders and subject to
certain closing conditions. It is anticipated that, subject to
stockholder approval, Sports Properties will change its name to
Medallion Management, Inc.
Consummation of the transactions contemplated by the framework
agreement are conditioned upon, among other things, the approval by
Sports Properties' stockholders and warrant holders of certain
amendments to Sports Properties' certificate of incorporation and
warrants, respectively. Sports Properties' warrant holders will be
asked to amend their respective warrants to, among other things,
(i) increase the exercise price from $7.00 to $12.00 per share in
exchange for extending the warrant expiration by three years to
January 17, 2015, (ii) increase the price at which Sports
Properties' common stock must trade before Sports Properties is
able to redeem the warrants issued in Sports Properties' initial
public offering in 2008 (the "IPO") from $14.25 to $18.75 and (iii)
eliminate the cashless exercise feature of the warrants issued in
Sports Properties' IPO. It is also contemplated that Medallion will
cancel, prior to or upon the consummation of the transactions
contemplated by the framework agreement, all of its shares acquired
from Sports Properties prior to its IPO that it still holds. In
addition, Sports Properties is in discussions with the underwriters
in its IPO to reduce a portion of the deferred underwriting
commissions.
Andrew Murstein, Vice Chairman of Sport Properties stated, "We
looked at many opportunities over the last two years, but we
believe this transaction in the taxi industry provides the best
opportunity available for our stockholders. We believe that as a
result of this transaction, we will be the only publicly traded
company focused on acquiring and managing taxicab medallions. In
major metropolitan areas of the United States, taxicabs are an
integral part of the transportation infrastructure.”
“Taxi operations have shown significant resiliency in the face
of challenging economic conditions. According to data published by
the New York City Taxi and Limousine Commission, since 1995, New
York City corporate taxi medallions, the transferable licenses
needed to operate street hail taxicabs in New York City, have
experienced an average annual appreciation of 17.63% and the
average price of a New York City corporate taxi medallion was
$767,000 at September 30, 2009. We believe that the existing
regulatory systems and related economic factors in not only New
York City, but in other cities as well, support the case for
additional appreciation in the value of the licenses and for higher
lease rates over time. Furthermore, we believe the taxi industry is
very fragmented with no one owner owning more than 1% of taxis
nationwide. This is a niche industry ripe for consolidation,"
continued Mr. Murstein.
Sports
Properties' Management and Investment Team
Andrew Murstein will become Chief Executive Officer and continue
as our Vice Chairman following consummation of the transaction. He
has been in the taxi industry for more than 20 years and is the
third generation in his family to be active in the industry. Leon
Murstein, Andrew’s grandfather began his career in the taxi
industry in 1937 when the City of New York sold 11,787 taxi
medallions for $10 each. The City of New York did not sell any new
medallions until 1996, and today only 13,237 taxi medallions are in
existence. Mr. Alvin Murstein has agreed to serve as the Chairman
of the Board of Directors following the consummation of the
transaction. He has been in the taxi industry for over 45 years.
Companies affiliated with Alvin Murstein and Andrew Murstein have
lent more than $3,000,000,000 to the taxi industry.
Sports Properties Acquisition Corp.
Sports Properties is a blank check company formed for the
purpose of acquiring, through merger, capital stock exchange, asset
or stock acquisition, exchangeable share transaction, joint venture
or other similar type of transaction or a combination of the
foregoing, of the assets of one or more domestic or international
operating businesses, or one or more domestic or international
operating businesses themselves. Since its initial public offering,
Sports Properties' activities have been limited to identifying and
evaluating prospective acquisition targets.
Forward-looking statements
This press release includes “forward-looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Sports
Properties' actual results may differ from its expectations,
estimates and projections and, consequently, you should not rely on
these forward looking statements as predictions of future events.
Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,”
“should,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Sports Properties' expectations with respect to future
performance, anticipated financial impacts of the proposed
transactions, certificate of incorporation, the trust agreement
amendments and warrant amendments and related transactions;
approval of the proposed certificate of incorporation, trust
agreement amendments, warrant amendments and related transactions
by shareholders and warrant holders, as applicable; the
satisfaction of the closing conditions to the proposed
transactions, certificate of incorporation, the trust agreement
amendment and warrant amendments and related transactions; and the
timing of the completion of the proposed transactions, certificate
of incorporation, trust agreement amendments, warrant amendments
and related transactions.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Sports Properties' control and difficult to predict.
Factors that may cause such differences include, but are not
limited to, the following: regulatory changes affecting the taxicab
industry; the level of rental revenue it achieves from its assets;
the market value and the supply of, and demand for, taxicab
medallions; the challenges that it may face as a result of the
current economic slow-down; the conditions in the local markets in
which it operates, as well as changes in national economic and
market conditions; its ability to lease and acquire taxicab
medallions; the level of revenue it achieves from its fleet
operations; its ability to enter into new leases or to renew leases
with existing lessees of its taxicab medallions at favorable rates;
the competitive landscape impacting the taxicab industry; its
relationships with its lessees and their financial condition; its
use of leverage as part of its financing strategy and its ability
to make payments or to comply with any covenants under any
borrowings or other debt facilities it obtains; the growth or
continuing importance of taxicabs located in the major metropolitan
areas in which it invests; the level of its operating expenses,
including amounts it is required to pay to its management team; its
net realized gain or loss on the sale or other disposition of
taxicab medallions; and changes in interest rates that could impact
the market price of its common stock and the cost of its
borrowings. Other factors include the possibility that the
transactions contemplated by the framework agreement do not close,
including due to the failure to receive required stockholder and
warrantholder approvals, or the failure to meet other closing
conditions.
Sports Properties cautions that the foregoing list of factors is
not exclusive. Additional information concerning these and other
risk factors is contained in Sports Properties' most recent filings
with the Securities and Exchange Commission (“SEC”). All subsequent
written and oral forward-looking statements concerning Sports
Properties, the framework agreement, the related transactions or
other matters and attributable to Sports Properties or any person
acting on its behalf are expressly qualified in their entirety by
the cautionary statements above. Sports Properties cautions readers
not to place undue reliance upon any forward-looking statements,
which speak only as of the date made. Sports Properties does not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement
to reflect any change in its expectations or any change in events,
conditions or circumstances on which any such statement is
based.
Additional Information
Sports Properties intends to file a preliminary proxy statement
with the SEC in connection with the proposed transactions and to
mail a definitive proxy statement and other relevant documents to
Sports Properties stockholders and warrant holders. Stockholders
and warrant holders of Sports Properties and other interested
persons are advised to read, when available, the preliminary proxy
statement, and amendments thereto, and the definitive proxy
statement in connection with solicitation of proxies for the
special meetings of Sports Properties' stockholders and Sports
Properties' warrant holders to be held to approve the transactions
because this proxy statement will contain important information
about Sports Properties and the proposed transactions. Such persons
can also read Sports Properties' final prospectus from its initial
public offering dated January 17, 2008, its annual report on form
10-K for the fiscal year ended December 31, 2008, which was filed
with the SEC on March 27, 2009, as amended (“Annual Report”) and
other reports as filed with the SEC, for a description of the
security holdings of Sports Properties' officers and directors and
their affiliates and their other respective interests in the
successful consummation of the proposed transaction. The definitive
proxy statement will be mailed to stockholders and warrant holders
as of a record date to be established for voting on the proposed
transactions, certificate of incorporation amendments, trust
agreement amendments, warrant amendments and related transactions.
Stockholders and warrant holders will also be able to obtain a copy
of the preliminary and definitive proxy statements, without charge,
once available, at the SEC’s Internet site at http://www.sec.gov or
by directing a request to: Sports Properties Acquisition Corp., 437
Madison Avenue, New York, New York 10022, Attention: Andrew
Murstein, telephone (212) 328-2100.
Participation in Solicitation
Sports Properties, and its respective directors, executive
officers, affiliates and other persons may be deemed to be
participants in the solicitation of proxies for the special
meetings of Sports Properties' stockholders and Sports Properties'
warrant holders to approve the proposed transaction. A list of the
names of those directors and officers and descriptions of their
interests in Sports Properties is contained in Sports Properties'
Annual Report. Sports Properties' stockholders and warrant holders
may also obtain additional information about the interests of its
directors and officers in the transactions by reading the
preliminary proxy statement and other relevant materials to be
filed by Sports Properties with the SEC when they become
available.
Disclaimer
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of Sports Properties, nor shall there be any sale of any such
securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction.
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