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Marathon Partners Sends Letter to the Board of Dover Motorsports
Criticizes Board for
Wasting Corporate Assets on Ill-Advised Proposed Merger
Calls for Board to Immediately Hire a Nationally Recognized Investment
Banking Firm to Explore All Available Strategic Alternatives to Maximize
Stockholder Value
Calls on the Company to Immediately Appoint Two Independent Directors
Recommended by the Company's Unaffiliated Stockholders
NEW
YORK, Oct. 18 /PRNewswire/ -- Marathon Partners L.P. ("Marathon Partners")
today announced that it delivered a letter to the Board of Directors of
Dover Motorsports, Inc. (the "Company") (NYSE: DVD) in response to the
announcement by the Company that the merger agreement between the Company
and Dover Downs Gaming & Entertainment, Inc. ("Dover Gaming") has been
terminated. The letter criticizes the Board for wasting corporate assets
on the ill-advised merger and calls for the Company to authorize a
nationally recognized investment banking firm to explore all available
strategic alternatives to maximize stockholder value, including an open
and full auction process. In the letter, Marathon Partners also calls on
the Board to immediately appoint two independent directors recommended by
the Company's unaffiliated stockholders to the Board.
Mario D. Cibelli, managing member, stated, "While we are pleased the Board
has come to its senses and terminated the ill-advised merger proposal with
Dover Gaming, we are amazed that the Board ever proposed such a misguided
transaction in the first place. Simply reaching out to any of the
Company's unaffiliated stockholders would have told this Board that the
proposed merger would face strong opposition from the Company's
unaffiliated stockholders. Instead, the Board moved forward with its
plans, wasting untold amounts of stockholder money on financial and legal
advisors, until we publicly expressed our opposition to the deal. We call
on the Board to provide full and complete accounting to stockholders of
all funds spent in furtherance of this folly."
Mr. Cibelli continued, "In light of the terminated deal we call on the
Board to authorize a nationally recognized investment banking firm to
conduct a true open and robust exploration of all available strategic
alternatives to maximize stockholder value, including an open and full
auction process. Given the current Board's seemingly limitless ability to
destroy stockholder value, the Board should also immediately appoint two
independent directors recommended by the Company's unaffiliated
stockholders to the Board. This will help ensure the interests of the
Company's unaffiliated stockholders are fully and fairly considered in all
Board decisions."
Mr. Cibelli concluded, "A return to the status quo is unacceptable. We
will do all that we can to ensure that this Board is held accountable for
its waste of corporate assets and destruction of corporate value."
The full text of the letter follows:
Dear Members of the Board of Dover Motorsports, Inc.:
Marathon Partners L.P., including certain of its affiliates, is the
largest unaffiliated stockholder of Dover Motorsports, Inc. (the
"Company"), owning approximately 18.0% of the outstanding shares of the
Company. While we were pleased to learn that the Board had come to its
senses and terminated the ill-advised proposed merger with Dover Downs
Gaming & Entertainment, Inc. ("Dover Gaming"), we cannot understand how
the Board approved such a misguided transaction in the first place.
It should have been readily apparent that this proposed merger would face
strong opposition from the Company's unaffiliated stockholders. A simple
call to any unaffiliated stockholder would have told the Board this
without wasting stockholder money on legal advisors and financial advisors
to structure this botched deal. It should not have required a public
letter from us rebuking the Board's actions for the Board to reconsider
entering into such an ill-advised merger. We call on you to provide full
and complete disclosure of all funds spent by the Company in furtherance
of this folly. We continue to reserve all rights in connection therewith.
What little remained of the Board's credibility is now all but lost,
especially as far as representing the best interests of the Company's
unaffiliated stockholders is concerned. In light of the terminated deal,
we call on the Company to immediately announce that it will authorize a
nationally recognized investment banking firm to conduct an open and
robust exploration of all available strategic alternatives to maximize
stockholder value, including an open and full auction process. A return to
the status quo is simply unacceptable.
We have no faith, however, that the Board as currently composed is capable
of making decisions with the best interests of all stockholders in mind.
You have shown time and again that the interests of the Board and Chairman
Henry Tippie are paramount to those of your other stockholders.
Accordingly, we believe the Board should immediately appoint two
independent directors recommended by the Company's unaffiliated
stockholders. This should help ensure the interests of the Company's
unaffiliated stockholders are fully and fairly considered before the Board
commits the Company to another significant transaction. It is imperative
that any evaluation of strategic alternatives or full auction process be
overseen, at least in part, by these new independent directors. History
has shown that your unaffiliated stockholders desperately require
directors who are committed to vigorously exercising their fiduciary
duties for the benefit of all stockholders, not just Mr. Tippie.
The ill-advised and now terminated merger is not the only reason to
immediately appoint truly independent directors to the Board. Other
reasons include the dismal share price performance, the poor financial
performance and the Board's track record of making decisions that are not
in the best interests of shareholders.
We continue to believe there is an opportunity to reverse the long steep
decline in stockholder value. By exploring all available strategic
alternatives, including an open auction process, under the oversight of
truly independent directors the Board can demonstrate to stockholders that
the Company is not being run simply for the benefit of Mr. Tippie and
management. We hope the Board seriously considers our requests and look
forward to your response. However, if the Board appears content with a
return to the status quo, rest assured we will do all that we can to
ensure that this Board is held accountable for waste of corporate assets
and destruction of corporate value.
Sincerely,
Mario D. Cibelli
Managing Member
Contact:
Marathon Partners L.P.
Mario Cibelli or Eric Hidy,
212-490-0399
SOURCE Marathon Partners L.P.
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