OCTOBER 23, 2002
Formula 1 and CART
The stories circulating that Bernie Ecclestone may be buying into Championship Auto Racing Teams Inc. are interesting but there is still a long way to go before they become a reality. For a start CART is still a public company and in order for there to be a change in ownership the firm would need to get off Wall Street and go private.
There are signs that this could happen and yesterday CART announced a second amendment to its statutes (the first having been in mid-September) to allow Gerry Forsythe to increase his ownership of CART to 24.9%. In exchange for this Forsythe has agreed to vote with the board of directors on all strategic matters for the next three years.
The original statutes were designed to ensure that CART shareholders receive fair value and equal treatment in the event of any takeover of the company although, according to the announcement made, this amendment is "not
being made in response to any proposal to acquire CART".
If someone now tries to buy 15% or more of CART stock without the agreement of the board the stockholders will be entitled to beneficial terms. This is designed to avoid any hostile takeover that might be attempted.
However, if the board of directors agree to a takeover that will not be necessary.
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