Speedway Motorsports Inc. founder Bruton Smith proposed to buy out the company for about $734 million, a move that would take the U.S. racing-track owner private after almost a quarter century as a listed entity.
Sonic Financial Corp., the 92-year-old’s investment vehicle, is offering investors $18 a share, a 29 percent premium to the closing price in New York on Tuesday. Speedway’s board will form a committee of three independent directors to consider the proposal, the Concord, N.C.-based firm said on Wednesday.
The stock surged 33 percent to close the day at $18.55 in New York, indicating the market expects that Smith’s bid will be successful. Sonic already owns a 71 percent stake, according to data compiled by Bloomberg.
Smith is also the founder and executive chairman of Sonic Automotive Inc., the nation's fifth-largest auto dealership group based on new-vehicle retail sales.
Founded by Smith in 1959, Speedway owns eight motor-racing venues in U.S. cities such as Las Vegas, Atlanta, and Charlotte, North Carolina. The company reported a net loss of $12.4 million in the fourth quarter, compared with a profit of $113.7 million in 2017, after poor weather or extreme heat led to lower ticket sales at a number of major Nascar races last year.
Motor sport in the U.S. has suffered from a slump in popularity in recent years, with Nascar sponsors leaving in droves and television viewership posting record lows. International Speedway Corp., which runs the Daytona International Speedway in Florida, is considering a $1.9 billion bid from Nascar, which like International is controlled by the France family.
Speedway shares had declined 14 percent this year before Smith’s offer.