Smith family offers to buy back non-family shares of Speedway Motorsports Inc.
Could NASCAR’s two biggest track corporations both be going private?
NASCAR has already made an offer to purchase International Speedway Corporation. Wednesday, the Smith family revealed that it has made an offer to shareholders to buy back the shares of Speedway Motorsports Incorporated.
From a letter to the company’s board of directors:
Sonic Financial Corporation (“SFC”) is pleased to submit this non-binding proposal to acquire all of the outstanding shares of stock of Speedway Motorsports, Inc. (the “Company” or “TRK”) that are not owned by SFC, O. Bruton Smith, his family and entities controlled by Mr. Smith and his family (collectively with SFC, the “Smith Group”), for cash consideration of $18.00 per share (our “Proposal”). As you know, the Smith Group beneficially owns, directly or indirectly, approximately 29 million shares of TRK, and controls over 70% of the voting power of TRK.
We believe that our Proposal reflects an extremely attractive value to the Company’s public stockholders. Specifically, $18.00 per share represents a significant premium of 31% to yesterday’s closing price and 26% to the 30-day volume-weighted average price per share of $14.27 as of April 22, 2019.
As you know, NASCAR racing has faced several challenges in recent years, and the Company has been impacted by these challenges. NASCAR has indicated the sport would benefit from structural change. We believe TRK would be more able to compete in this challenging and changing environment as a private company.
ISC has long been a publicly held company that was originally spun off from NASCAR. SMI, founded by Bruton Smith in the 1950s, incorporated in 1994. SMI owns tracks like Charlotte Motor Speedway, Bristol Motor Speedway and Texas Motor Speedway. Overall, the Cup Series races at eight tracks owned by SMI.
What does this mean?
SMI’s move to be totally held by the Smith family makes sense after NASCAR’s move to privately own ISC. And it could be a sign that big changes are on the horizon for the NASCAR schedule.
A sticking point in NASCAR schedule renovations has been the publicly-owned status of the majority of tracks on the series’ schedules. With both SMI and ISC potentially going private ahead of the 2020 season, it’s the perfect time for NASCAR to try a long-teased schedule overhaul for the 2021 season. It’s much easier to shuffle a schedule when you don’t have to answer to shareholders.
NASCAR already has made some significant — for them — changes to the 2020 schedule. Those changes included moving the final race of the season from Homestead to Phoenix, a track owned by ISC that recently underwent a massive makeover.
There could also be bigger changes on the horizon too. Companies don’t go from public to private without a lot of thought. You can bet that NASCAR and the two track companies have a long-term strategy in place. And it could involve more than potentially just changing up the schedule.
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Nick Bromberg is a writer for Yahoo Sports.
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