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Old 11 Sep 2003, 01:39 (Ref:714605)   #1
RaceTime
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Open Wheel Racing Series To Acquire Championship Auto Racing Teams

OPEN WHEEL RACING SERIES TO ACQUIRE CHAMPIONSHIP AUTO RACING TEAMS

INDIANAPOLIS - SEPTEMBER 10, 2003 – Championship Auto Racing Teams, Inc. (NYSE: MPH) and Open Wheel Racing Series LLC today announced they have signed a definitive agreement providing for Open Wheel Racing Series to acquire Championship for cash equivalent to $0.56 per share, based on the number of shares of Championship common stock currently outstanding. Open Wheel Racing Series has previously stated that, if the transaction is completed, it intends to continue to operate the business of Championship, including continuing to sanction the motorsports series currently known as “Bridgestone Presents the Champ Car World Series Powered by Ford.”
Open Wheel Racing Series is a newly formed holding company owned indirectly by a group of investors including Gerald R. Forsythe, Kevin Kalkhoven and Paul Gentilozzi. Mr. Forsythe or entities owned or controlled by him currently have beneficial ownership of 3,377,400 shares of Championship common stock, approximately 22.9% of the outstanding shares of Championship. These shares will be contributed to Open Wheel Racing Series rather than acquired for cash.

Under the terms of the agreement, Open Wheel Racing Series may terminate the agreement on or prior to September 18, 2003 if Open Wheel Racing Series in its discretion determines that it is inadvisable to proceed with the transaction for any reason whatsoever. Open Wheel Racing Series insisted on this termination right so it could complete its due diligence process.

Under the agreement, the transaction must be approved by stockholders holding a majority of the outstanding shares of Championship. Pursuant to a prior agreement between Mr. Forsythe and Championship, 1,169,680 of Mr. Forsythe’s shares will be voted in accordance with the recommendation of the Championship Board, and Open Wheel Racing Series has committed to vote the remainder in favor of the transaction. Under the agreement, the transaction also must be approved by disinterested stockholders holding a majority of the disinterested shares that actually vote at the stockholders meeting. None of Mr. Forsythe’s shares, including those voted in accordance with the recommendation of the Championship Board, however, will be treated as “disinterested.”

In addition to the stockholder approvals, the transaction is subject to various other conditions, including (1) absence of a material adverse effect or bankruptcy event with respect to Championship, (2) subject to certain exceptions, there not being any pending or threatened suits advancing non-frivolous claims that Open Wheel Racing Series reasonably believes would not be covered by Championship’s insurance policies or that seek to prevent consummation of the merger, prevent Open Wheel Racing Series from owning Championship or prevent Open Wheel Racing Series from operating any material part of Championship’s business, (3) appraisal rights under Delaware law being exercised with respect to no more than 16% of outstanding shares and (4) the termination of all outstanding stock options. The transaction is expected to close towards the end of 2003.

Under the agreement, Championship’s Board retains the ability to pursue and accept a superior acquisition proposal. However, Open Wheel Racing Series is entitled to receive a termination fee of $350,000 if Championship accepts a superior proposal or if Open Wheel Racing Series terminates the agreement because Championship’s Board withdraws or adversely modifies its recommendation of the transaction to Championship’s stockholders or takes action under its shareholder rights agreement to permit another person or entity to acquire 15% or more of Championship’s stock.

Championship is being advised by Bear, Stearns & Co. Inc. in connection with the transaction.

In connection with the announcement of the transaction, Christopher R. Pook, Championship’s president and chief executive officer stated: “As we have previously disclosed, this past year has been incredibly difficult for Championship. We believe this transaction provides the best value available to stockholders while at the same time making it possible for our series to continue in the future. We realize that the price is disappointing compared to recent trading prices for our stock. Management and the Board energetically pursued other alternatives but we believe that there is not any better alternative for our stockholders. We even considered liquidating the company, but concluded that after covering all our existing obligations and all of the liabilities that would be created if Championship went out of business there would be less left for our stockholders than the consideration offered in this transaction.”

Kevin Kalkhoven and Paul Gentilozzi, principals in Open Wheel Racing Series, stated: “Championship has millions of people who come to the races and even more follow it around the world on television. Open Wheel Racing Series intends to fulfill its commitment to these fans by keeping Championship in its current format of ovals, road races and street courses. It is our intention that Championship will be the premier open wheel racing series of the Americas. We will also take the opportunity of continuing successful overseas programs such as Surfers Paradise in Australia.”

Open Wheel Racing Series also believes that the long-term future of open wheel racing in the Americas will be enhanced by introducing new fans to Championship by its collaboration with MotoRock.

ABOUT CHAMPIONSHIP AUTO RACING TEAMS, INC.

Championship Auto Racing Teams, Inc. (NYSE: MPH) owns, operates and markets the 2003 Bridgestone Presents The Champ Car World Series Powered by Ford. Veteran racing teams such as Newman/Haas Racing, Player’s/Forsythe Racing, Team Rahal, Patrick Racing and Walker Racing will compete with many new teams this year in pursuit of the Vanderbilt Cup. CART Champ Cars are thoroughbred racing machines that reach speeds in excess of 200 miles per hour, showcasing the technical expertise of manufacturers such as Ford Motor Company, Lola Cars, Reynard Motorsport and Bridgestone/Firestone North American Tire, LLC. The 19-race 2003 Bridgestone Presents The Champ Car World Series Powered by Ford will be broadcast by television partners CBS and SPEED Channel. CART also owns and operates its top development series, the Toyota Atlantic Championship. Learn more about CART’S open-wheel racing series at www.champcarworldseries.com.

ADDITIONAL INFORMATION

Stockholders of Championship Auto Racing Teams, Inc. are urged to read the proxy statement that Championship Auto Racing Teams, Inc. will file on Schedule 14A with the Securities and Exchange Commission (“SEC”) when it becomes available, and any other relevant documents filed or to be filed in the future with the SEC because those documents will contain important information about Championship Auto Racing Teams, Inc., the proposed transaction and related matters. Investors and security holders can obtain free copies of the proxy statement when it becomes available at Championship Auto Racing Teams, Inc.’s website, www.champcarworldseries.com. Investors and security holders can also obtain free copies of the proxy statement when it becomes available and other documents filed by Championship Auto Racing Teams, Inc. with the SEC at the SEC’s web site at www.sec.gov. Any reports, statements and other information filed by Championship Auto Racing Teams, Inc. may be read and copied at the SEC public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information.
Championship Auto Racing Teams, Inc., and its directors and executive officers may be deemed to be participants in the solicitation of proxies of Championship Auto Racing Teams, Inc.’s stockholders to approve the proposed transaction. Such individuals may have interests in the transaction, including as a result of holding options or shares of Championship Auto Racing Teams, Inc.’s stock. Information regarding these directors and executive officers and their ownership of Championship Auto Racing Team options and stock is contained in Championship Auto Racing Team’s proxy statement on Schedule 14A, filed with the SEC on June 16, 2003. Additional information regarding these directors and executive officers will be included in the proxy statement filed in connection with this transaction.
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Old 11 Sep 2003, 02:04 (Ref:714606)   #2
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Well there it is....
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Old 11 Sep 2003, 02:06 (Ref:714607)   #3
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But how long is this transaction going to take?
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Old 11 Sep 2003, 02:12 (Ref:714608)   #4
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paul-collins should be qualifying in the top 3 on the gridpaul-collins should be qualifying in the top 3 on the gridpaul-collins should be qualifying in the top 3 on the grid
...and there was much rejoicing...

First hurdle, done. What's next?
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Old 11 Sep 2003, 02:12 (Ref:714609)   #5
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Good question...hopefully quickly. At least it's on the table now. 0.56 cents is low, but honestly, how would Cart possibly get anymore for its shareholders? I'd take it if I were a shareholder. (well..actually, I'd sell my shares now).
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Old 11 Sep 2003, 02:20 (Ref:714611)   #6
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Snrub should be qualifying in the top 5 on the gridSnrub should be qualifying in the top 5 on the grid
Let's get this done and get it behind us. We need to concentrate on:
1. Improve the quality of racing. It's getting better and better, but it's not up to what it was a couple years ago.
2. Get more people watching live and on TV. They need to do more with CBS next year and figure out how to avoid conflicts of schedule.

One thing I've wondered about is saturday afternoon racing. Why not prevent it from comming into conflict with other series and other scheduled events? Surely there are a similar number of people watching TV at that time. I suppose qualifying loses some ticket sales, but maybe they should do qualifying the day of. (although maybe there is some PR drawbacks of an entire day to do the announcment of pole, etc.)
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Old 11 Sep 2003, 02:32 (Ref:714614)   #7
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Open Wheel Racing Series intends to fulfill its commitment to these fans by keeping Championship in its current format of ovals, road races and street courses. It is our intention that Championship will be the premier open wheel racing series of the Americas. We will also take the opportunity of continuing successful overseas programs such as Surfers Paradise in Australia.”


Now THAT is a vision.

Not out of the woods but the light is in sight and we've taken another big step.
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Old 11 Sep 2003, 03:29 (Ref:714631)   #8
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This sounds good to me. I was worried that this would drag on for a lot longer. Are we now to a point where sponsers can start making plans and bugets for next year? Can we get the 2004 schedule set?
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Old 11 Sep 2003, 03:48 (Ref:714633)   #9
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indycool should be qualifying in the top 10 on the gridindycool should be qualifying in the top 10 on the grid
"The transaction is expected to close near the end of 2003" to answer that question. That could continue to pose a hardship for the teams and venues.
I also find the absence of Russo and Motorock puzzling. Maybe Gentilozzi is carrying Motorock's flag in it, but it looks like Russo is out.
Pook seemingly answered one question: Liquidation was going to outweigh the 56-cent price offered.
But it does say OWRS can pull the plug anytime in the next eight days and can also pull the plug if Vannini sues.
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Old 11 Sep 2003, 04:04 (Ref:714634)   #10
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I am finding hard to beleive that C^RT would make this announcement if they didn't have the Vannini issue pretty well covered. I may be wrong but I think there has got to be something going on there that is being held under very close cover. This is going to be very interesting to watch.
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Old 11 Sep 2003, 04:26 (Ref:714640)   #11
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indycool should be qualifying in the top 10 on the gridindycool should be qualifying in the top 10 on the grid
Yes, flatspot, it'll be interesting. I just saw a quote from Vannini on another board in which he stated he wouldn't vote for it and he doesn't think it'll go through because he can't see all the OWRS conditions being met.
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Old 11 Sep 2003, 04:35 (Ref:714644)   #12
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I hope you're right Flatspot...in fact I think you are. I'm not sure of the legalities involved, but I wouldn't be surprised if Cart settled something Vannini on the side. Hopefully that'll take care of it.
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Old 11 Sep 2003, 04:37 (Ref:714647)   #13
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indycool should be qualifying in the top 10 on the gridindycool should be qualifying in the top 10 on the grid
Jay, it hasn't happened.....Vannini reaction quote just went up on AR! saying he wouldn't vote for the deal and doesn't think others would, either. Described the offer as "pure fantasy."
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Old 11 Sep 2003, 05:02 (Ref:714657)   #14
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well, we'll see where it goes... AR1 seems to have some kind of in with Vannini, relationship? Anyway, that may be the initial reaction, but much like this deal, things don't happen overnight. Again, we'll see where it all goes.
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Old 11 Sep 2003, 05:12 (Ref:714659)   #15
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macdaddy has a real shot at the podium!macdaddy has a real shot at the podium!macdaddy has a real shot at the podium!macdaddy has a real shot at the podium!
"Let's get this done and get it behind us." - Snrub

Couldn't have said it better myself.

Indycool noticed something that I has missed... The absence of Russo's name on that release. Up until now he seemed to have been the most vocal about their future plans, however I was getting the impression that the other parties involved weren't necessarily on the same page. And their latest statement, "It is our intention that Championship will be the premier open wheel racing series of the Americas," seems to contradict some of the hints that Russo had been giving. How can we find out for sure if Carl is still involved?

Vannini... Vannini... Vannini...
I get the impression that we've not heard the last of him.

But, as Paul said, the first hurdle has been cleared. And it was a big one.



(I'd be remiss if I left out the beer-thingy!)
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