CONCORD, N.C. — Speedway Motorsports Inc. announced recently that it has entered into a merger agreement with Sonic Financial Corp.
If the deal is consummated, the track operator will become a wholly-owned subsidiary and become privately owned.
Sonic Financial collectively represents various factions of the Smith family members. O. Bruton Smith founded Speedway Motorsports in the late 1950s, Marcus G. Smith is the CEO and Scott Smith is the co-founder of Sonic Automotive Inc.
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In April of 2019, Sonic Financial made an offer to acquire all of the outstanding shares of stock for $18 per share. This was approximately a 25 percent premium to the previous 30-day trading price.
The offer has been raised to $19.75 per share. The merger agreement was unanimously approved by the Board of Directors, after a recommendation of a special committee of independent and disinterested board members.
The closing of the transaction is expected to take place during the third quarter of 2019.
The Smith family collectively owns more than 70 percent of the voting stock in Speedway Motorsports. The vote is subject to approval by over 50 percent of the remaining stock. Those shares are primarily held by institutional fund managers.
The company obtained a debt financing commitment from Bank of America, which includes a $250 million term loan and $100 million revolver.
If the deal in terminated by Speedway Motorsports, the company will have to pay a $24 million breakup fee to Sonic Financial and $40 million by the other side.
Advisors to the deal included Morgan Stanley & Co. LLC, Simpson Thacher & Bartlett LLP, McGuireWoods LLP, BofA Merrill Lynch, Kirkland & Ellis LLP, and Parker Poe Adams & Bernstein LLP.