CART says it has received a proposal from a newly formed holding company called the Open Wheel Racing Series, to enter into a letter of intent 'contemplating the acquisition of all of the outstanding shares in CART' for approximately $.50 cash per share.
The holding company is owned indirectly by a group of investors which includes Forsythe, Kevin Kalkhoven, Paul Gentilozzi, Carl Russo and Motorock LLC.
Open Wheel Racing Series and the group of investors currently have beneficial ownership of 3,377,400 shares of CART common stock, all of which shares are held by Forsythe or entities owned or controlled by him.
Such shares constitute approximately 22.9 percent of the outstanding shares of CART common stock.
Said a CART statement: "CART previously amended its shareholder rights agreement to provide that the formation of a group that makes an acquisition proposal at the invitation of CART, such as this group that made the proposal received by CART, will not be covered by the shareholder rights agreement unless CART has advised such group that it no longer wishes to consider a proposal from it.
"There cannot be any assurance that the discussions with the group of investors described above will result in any transaction or as to the terms and conditions of any transaction that may be proposed to or pursued by CART, including whether the terms and conditions of any such proposal will be materially improved from the terms of the proposal already received by CART.
"As previously announced, CART has retained the investment banking firm of Bear, Stearns & Co. to assist it in exploring the availability of needed financing and other strategic alternatives."
CART has been rapidly burning through its cash reserves and recently confirmed it expected to be out of cash mid-way through the 2004 season.
It also said it did not expect the series to become profitable until 2006 'at the earliest'.
Last week it confirmed it was re-evaluating its self-promoted races due to spiralling losses, and was scrapping its support payments to teams.
