The PTO’s next move – it’s about more than just The Collins Cup…
Busy times at PTO Towers of late.
In September last year (HERE), the Professional Triathletes Organisation (www.protriathletes.org) announced what seemed at the time to be a somewhat left-field approach to acquire the assets of Wanda Sports Group (owners of IRONMAN® / World Triathlon Corporation), related to its worldwide triathlon and mass participation business.
That was swiftly rebuffed (HERE) – while in the interim, the PTO have made big strides towards the delivery of The Collins Cup, the ‘Ryder Cup of Triathlon’ styled event, which has been many years in talks and plans, which many had given up hope of ever seeing. If nothing else, you have to respect the persistence and belief of those behind the scenes to continue with that project, when many would have thrown in the towel a long time ago.
As I said at the time of that Collins Cup announcement (HERE), in my eyes by far the biggest news of that week was not a $2million prize (appearance?) purse or an event in Slovakia, but the news of the partnership with Crankstart Investments, headed by ‘Welsh billionaire’ (the wider press loves that term…), Sir Michael Moritz. That tie-up, on the surface at least, provides a lot more legitimacy to the plans and ideas of the PTO. It certainly ‘feels’ like a different organisation, versus that which made that September 2019 approach.
And now, the PTO are publicly renewing that interest in an acquisition on the biggest name in long distance triathlon. The full details of that approach is published below (and available online HERE).
What is interesting is the terms of the proposal – which to me at least, would suggest a willingness to discuss a range of different approaches to moving forward with a ‘deal’ is this wording:
“The PTO is prepared to consider an all-cash transaction or one in which the existing shareholders of WSG are able to participate in the growth of the WTC Business that the PTO is uniquely positioned to deliver.
and,
We are happy to work with any other financially stable group who may be interested in acquiring the WTC Business, reducing its debt load and unleashing the value only the PTO and its professional athletes can deliver.
With Wanda Sports Group now being a publicly quoted company on the NASDAQ – and having debuted on the market at $6, now currently trading at around half of that level – that, perhaps, is a clever way of saying “this is clearly not providing a great return to your investors… but we are happy to discuss a variety of ways which would help address that, while also being aligned with our own objectives. The ball is in your court, let’s talk.”
Given the Board’s duty to its shareholders, they will be expected to provide guidance and logic, before potentially saying “no” for the second time. As they say, interesting times.
PTO RENEWS INTEREST IN IRONMAN AND EXPRESSES WILLINGNESS TO WORK WITH OTHER POTENTIAL ACQUIRERS
The Professional Triathletes Organisation today released the following letter sent to the Board of Directors of Wanda Sports Group Company Limited on 3rd February 2020 advising the Board that the PTO has closed on its financial partnership with Crankstart Investments and renewing the PTO’s proposal to enter into discussions to acquire the IRONMAN® business.
3rd February 2020
Board of Directors, Wanda Sports Group Company Limited
Andrew Messick, Chief Executive Officer, World Triathlon Corporation
Dear Members of the Board:
We are writing on behalf of the Professional Triathletes Organisation (the “PTO”) to advise you that we have closed on our partnership financing with Crankstart Investments. We again want to put forth our proposal to enter into discussions for the acquisition by the PTO of all of the assets of the Wanda Sports Group Company Limited (“WSG”) related to its worldwide triathlon and mass participation business (the “WTC Business”).
The PTO is prepared to consider an all-cash transaction or one in which the existing shareholders of WSG are able to participate in the growth of the WTC Business that the PTO is uniquely positioned to deliver. We strongly believe that it is only with the assistance of the PTO and its professional athletes that the WTC Business has the ability to stabilise and grow, and that without our cooperation the WTC Business would deteriorate. We are happy to work with any other financially stable group who may be interested in acquiring the WTC Business, reducing its debt load and unleashing the value only the PTO and its professional athletes can deliver.
The PTO and North Point Advisors, our financial advisors, are prepared to begin discussions forthwith with your senior management and your financial advisors and to sign a customary confidentiality agreement in order to commence certain confirmatory due diligence. In light of the significance of this proposal to your shareholders and the triathlon community, as well as the potential for selective disclosures, we will publicly release the text of this letter tomorrow morning.
We believe this proposal represents a unique opportunity to realise significant value for WSG shareholders and employees, and that the PTO can uniquely provide a healthy and growing environment for the WTC Business.
We hope that you and your Board share our enthusiasm and, consistent with applicable fiduciary duties, we look forward to a prompt and favourable reply.
Respectfully yours,
Charles D. Adamo––Chairman
Sam Renouf––Chief Executive Officer
Rachel Joyce––Co-President
Tim O’Donnell––Co-President
cc: David Jacquin, North Point Advisors, 580 California Street, Suite 200, San Francisco, CA 94104