The France family is looking to merge its sanctioning body, NASCAR, and its track-operating company, International Speedway Corporation, into one privately run company that it would operate.
The France family, through its ownership of NASCAR, announced that it has submitted a non-binding cash offer to acquire all outstanding shares of Class A common stock and Class B common stock of ISC at $42 a share. The stock price is at $39.06.
As of Aug. 31, the France Family Group controlled approximately 74.2 percent of the combined voting power of the outstanding ISC stock. The total value of ISC stock, including those owned by the France family, was $1.722 billion as of Friday.
ISC operates 12 race tracks where the NASCAR Cup Series races. NASCAR sanctions races and also owns a few racetracks, including Iowa Speedway and through its ownership of the sports-car racing sanctioning body IMSA, Road Atlanta and Sebring.
“In a highly competitive sports and entertainment landscape, a more unified strategic approach is important to our future growth,” said NASCAR Chairman Jim France, who also chairs the ISC board of directors.
“We believe the industry requires structural changes to best position the sport for long-term success and this offer represents a positive step forward in that direction.”
The news releases from NASCAR and ISC indicated that there is no interest in ISC entertaining any other offers as the France family is not interested in selling its shares of ISC at this time.
NASCAR and ISC will operate as separate independent entities as the offer is reviewed by a committee of ISC board members who are not part of the France family. J. Hyatt Brown will chair the ISC special committee. Any deal would have to be approved by a majority of ISC stockholders who are not members of the France family.
NASCAR and ISC sent a note to employees Friday asking them to continue their respective work. It sent a letter to NASCAR Cup team owners saying that the process will take some time.
In their letter to the ISC board, Jim France and Lesa France Kennedy wrote: “We believe the industry would benefit from structural change in order to best position the sport on a going forward basis. This will require significant time, effort, and investment. We believe that this transformation will be best undertaken as a private company.
“Moreover, we believe that the consolidation of the ownership of ISC and NASCAR, as private companies guided by the Family Stockholders, is in the best interests of all constituents of the sport and will position motorsports for long-term success and viability.”
Seven-time NASCAR Cup Series Jimmie Johnson speculated on what the merge may mean.
“We’ve all kicked around so many ideas. Do you shorten the schedule? Do you have weekday races?” he said.
“That unity and that collaboration of those two entities combined would be a step in that direction, I would think. It would hopefully open those doors to let those conversations really happen and progress be made.”
Scott Cooper, spokesman for Speedway Motorsports Inc., which owns nine of the 23 tracks where the NASCAR Cup Series competes, said SMI has no comment on the news.
NASCAR has retained Goldman Sachs & Co. LLC as its financial adviser and Baker Botts as its legal counsel in connection with the negotiation and consummation of a mutually acceptable transaction. BDT & Company is serving as financial adviser to the France family.
Earlier this year, NASCAR had hired Goldman Sachs to determine the value of NASCAR for the France family, establishing a price for a potential sale.
No timetable was announced.
“The company cautions shareholders and others considering trading in its securities that the Board just received the non-binding proposal letter from NASCAR and no decisions have been made with respect to the company’s response to the proposal,” ISC said in a news release. “There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated.”
