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Forum Project Summary
Dover Motorsports, Inc.
Shareholders of Dover Motorsports, Inc. (NYSE: DVD), have encouraged a Forum project to provide an exchange of views among investors and the company’s management on issues relevant to their decisions, starting with these: ► Pricing ranges that investors might consider fair for an immediate cash sale of Dover ► Values that might be accepted for non-taxable exchanges of stock in a company that could profitably develop Dover’s operations ► Plans that might justify deferring explorations of transactions until industry and market conditions improve
The need for shareholder consideration of strategic alternatives has been stimulated by a senior executive’s recent statements disclosing management’s past and continuing efforts to negotiate a sale of the company:[1] “... [letter page 2] On May 2, 2007, Henry Tippie[2] and I, together with other Dover Motorsports' executives, met with Bruton Smith,[3] Lesa Kennedy[4] and various other people at an airplane hangar in Dallas, Texas. The purpose of the meeting was to entertain an offer to acquire Dover Motorsports from an alliance that had been formed by Speedway Motorsports, Inc and International Speedway Corporation…. “Bruton Smith led the negotiations for the alliance. …He stated as follows at the meeting: ‘You know that there are only two buyers for your company and that they're both sitting at this table. You have to do something. And you don't have a choice but to sell to us.’ [emphasis in original] “Mr. Smith proceeded to offer to buy the company at market value with no premium. After about an hour of discussions, he offered an additional nickel per share. Why he chose to be so insulting is anyone's guess, but the meeting adjourned shortly after this. “… [letter page 4] We are continuing to run Dover's business and doing our best to get to the other side of what is a very difficult economic cycle. …Selling at the absolute bottom of the market might be something you'd like to see us do, but we are not under any pressure to sell. We will continue to evaluate any acquisition offers that may be made from time to time. But you will not hear about any of them from us until we are in a position to make an announcement to all of our stockholders….” Dover’s management has been invited to offer their views, and any statements they provide will be reported to Forum participants. Comments of Dover’s shareholders and other Forum participants will of course also be welcomed, either privately or for reporting according to the Forum’s standard policies supporting your anonymous communications of information and views.
October 7, 2009 Forum chairman: Gary Lutin Lutin & Company, 575 Madison Avenue, New York, New York 10022 Telephone: 212-605-0335 Email: gl@shareholderforum.com
[1] The quotations are presented only for the purpose of reporting views of the company’s management, as stated by a senior executive officer in a letter to a public shareholder with an explicitly expressed understanding that the communication was not to be considered confidential. The letter’s statements of facts and assumptions may be disputed, as indicated in this statement submitted by the addressee, Mario Cibelli of Marathon Partners LP, which is the largest public shareholder of Dover Motorsports with 16.3% of the Common Stock and 8.1% of the total Common and Class A shares outstanding: “Please note that I consider many of the letter’s statements and assumptions to be incorrect. For example, there is no basis in fact for the letter’s suggestion that I was aware of a May 2007 meeting between Dover Motorsports and other auto racing executives concerning an offer to acquire the company. I did not know about the meeting until I received the letter. In relation to the failed negotiations to sell Dover Motorsports, it should be obvious that Marathon Partners, as the Company's largest public shareholder, is solely interested in generating full value for its investment.” For a copy of the full letter, see September 9, 2009 letter from Klaus M. Belohoubek, Senior Vice President and General Counsel of Dover Motorsports, Inc., to Mario D. Cibelli, Managing Member of Marathon Partners LP (4 pages, 656 KB, in PDF format). [2] Henry B. Tippie is the Chairman of the Board of Directors of Dover Motorsports, and is its controlling shareholder pursuant to a 2008 voting agreement. [3] O. Bruton Smith is the Chairman and Chief Executive Officer of Speedway Motorsports, Inc. (NYSE: TRK). [4] Lesa France Kennedy is the Vice Chairman and Chief Executive Officer of International Speedway Corporation (Nasdaq: ISCA).
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