CART announces Open Wheel buy-out offer

CART says it has declined to sign the letter, but is engaged in negotiations regarding a possible transaction with the group. A copy of the filing is available from the US Security Exchange Commission.

Open Wheel currently holds beneficial ownership of 3,377400 shares in CART (22.9 percent of the outstanding share stock), all owned by Forsythe or entities controlled by him.

The members of Open Wheel, which has offices in Menlo Park, CA, have committed initial additional startup funding of $15m to their company after the proposed acquisition, which would enable it to continue to operate the business of CART, including the Champ Car World Series. They say that, if a third party intending to continue to operate the business makes a superior offer, they would support that offer.

They say that the offer price reflects CART's requirement for significant additional capital to maintain its ongoing operations and the fact that, if this capital were raised through an equity financing, CART shareholders would likely suffer sufficient dilution to reduce the market price of the Common Stock to less than the offer price.

They stress that they believe that CART's format, which features races on superspeedways, ovals, temporary street courses in urban settings and permanent road courses, can be successful with the proper organisational and capital structure.

Open Wheel would focus on CART's three constituencies: fans, sponsors and teams. Open Wheel would seek to broaden the fan base by maintaining the current series format as well as entering into strategic agreements with other parties (including Motorock) to organise music festivals, concerts, events and contests in conjunction with CART racing events. This would provide enhanced value to sponsors by increasing the fan base both at race venues and via other broadcast mediums. The financial interests of the teams are best promoted by creating a stable business environment.