FOR IMMEDIATE RELEASE For further information, call:
Denis McGlynn, President and
March 27, 1998 Chief Executive Officer
Dover Downs Entertainment, Inc.
(302) 674-4600, ext. 200
Christopher R. Pook, Chairman and
Chief Executive Officer
Grand Prix Association of Long Beach, Inc.
(562) 490-4521
DOVER DOWNS ENTERTAINMENT, INC. AND
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
EXECUTE MERGER AGREEMENT
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Dover Downs Entertainment, Inc. (NYSE: DVD; herein "Dover") and Grand Prix
Association of Long Beach, Inc. (NASDAQ: GPLB; herein "Grand Prix") jointly
announced today that they have entered into an Agreement and Plan of Merger
pursuant to which Grand Prix will become a wholly-owned subsidiary of Dover.
After the merger, the combined companies will be positioned to offer a broad
spectrum of motorsports events in geographically diversified markets. On the
East Coast, Dover Downs International Speedway (DE) annually presents two NASCAR
Winston Cup Series races, two NASCAR Busch Grand National Series races and an
Indy Racing League event. Centrally located in mid-USA are Nashville Speedway,
USA which presents one NASCAR Busch Grand National Series race, one NASCAR
Craftsman Truck race and the premier NASCAR All-Pro Series race; Memphis
Motorsports Park which hosts a NASCAR Craftsman Truck race and a NHRA National
Championship event; and Gateway International Raceway in St. Louis which
conducts one NASCAR Busch Grand National Series race, one NASCAR Craftsman Truck
race, one CART Indy car race and one NHRA national championship race. On the
West Coast, Grand Prix of Long Beach (CA) presents the nation's largest CART
race for the FedEx Championship. The combined companies' 15 major events and
numerous other races will impact 31 of the top 50 U.S. advertising markets whose
populations total more than 100 million people.
"It will be difficult to find a more diversified motorsports company," said
Denis McGlynn, President & Chief Executive Officer of Dover Downs Entertainment,
Inc. "We will offer every major form of motorsports available in the U.S. and
will have a significant presence in major markets on both coasts as well as in
the central regions of our country. We expect this merger will create excellent
value for our shareholders."
Grand Prix Chairman and CEO, Christopher R. Pook said, "We are delighted to
become a significant part of the great Dover Downs Entertainment group. This
merger will allow us to have the resources necessary to realize efficiently the
full value of Gateway International Raceway in St. Louis and Memphis Motorsports
Park in Tennessee. It will also diversify our operations and should provide
tremendous value to our shareholders. It is one of the most exciting events in
the twenty-four year history of the Grand Prix Association of Long Beach, Inc.
and a true win/win for both organizations, as well as the host cities of Long
Beach, St. Louis, Memphis, Dover and Nashville, all of whom should expect to
enjoy increased economic impacts as a result of all the activities being
operated by the newly combined companies."
The merger is structured as a tax-free exchange and contemplates that each
shareholder of Grand Prix will receive .63 shares of common stock of Dover for
each share of common stock of Grand Prix owned by such shareholder, subject to
certain adjustments if the fifteen day average price of common stock of Dover
prior to closing is greater than $32.00 or less than $21.00 per share, provided
that the exchange ratio shall not be greater than .6963 nor less than .5929.
Christopher Pook will remain Chairman and Chief Executive Officer of Grand Prix
and join Dover's Board of Directors.
Certain shareholders of Grand Prix, representing approximately 38 percent of the
outstanding common stock of Grand Prix on a fully diluted basis, have entered
into support agreements with Dover pursuant to which they have granted to Dover
a proxy to vote their shares in favor of the merger and an option to Dover to
purchase their shares upon the happening of certain events. Combined with
680,000 shares of common stock of Grand Prix under agreement to be purchased by
Dover later today from two non-management shareholders, over 50% of the
outstanding common stock of Grand Prix on a fully diluted basis is committed to
consummating the merger. Certain holders of the capital stock of Dover,
representing more than a majority of its voting rights, have similarly agreed to
vote their shares in favor of the merger.
The merger is expected to close in June, 1998 and is subject to approval of the
shareholders of both Dover and Grand Prix, expiration of the Hart-Scott-Rodino
waiting period and certain other customary conditions.
This release contains or may contain forward-looking statements based on
management's beliefs and assumptions. Such statements are subject to various
risks and uncertainties, such as completion of the merger and successful
integration of the two companies, which could cause results to vary materially.
Please refer to the companies' respective SEC filings for a discussion of other
factors.
* * *
Dover Downs Entertainment, Inc. owns and operates a multi-purpose entertainment
complex conducting NASCAR and Indy Racing League auto racing, harness horse
racing, pari-mutuel wagering on simulcast harness and thoroughbred horse races
and video lottery (slot) machine operations in Dover, Delaware. The Company
also owns and operates Nashville Speedway, USA located at the Tennessee State
Fairgrounds in Nashville.
Grand Prix Association of Long Beach is the owner and operator of the Toyota
Grand Prix of Long Beach, the annual Indy car race run on the streets of Long
Beach since 1975. In addition, the company owns and operates Gateway
International Raceway in St. Louis and Memphis Motorsports Park.