Friday, 27 May 2016
Last updated 2 hours ago
Sep 25 2008 | 2:21pm ET
New York-based activist hedge fund Marathon Partners is driving Dover Motorsports’ management to do the only thing that it deems to make sense: sell.
In a letter to Dover management, Marathon manager Mario Cibelli said he was concerned with the direction of company because its board of directors and management team hasn’t “shown a desire to deal with the troubled Midwest assets in a sensible manner.”
Cibelli argues that the company’s Midwest tracks are acting as an anchor on its share price and its ability to negotiate an attractive offer for the company.
“Continuing to fund the sizable losses of a business unit that has no hope of a turnaround strikes us as either lackadaisical or arrogant given the current environment,” he wrote. “How much weaker will market conditions need to be in order for directors to stop plowing the Monster Mile's free cash flow into the Midwest money pit?”
And as he has pointed out in the past, Cibelli says Dover Motorsports' lack of scale and terrible track record of value creation over the years makes it clear that selling is the best option available for the company.