Sports Properties Acquisition Corp. (stock symbol: [t]HMR[/t]), which raised $215.6 million when it went public in January 2008, has announced it wants to continue its existence as a "Taxi Medallion Acquiror and Manager."
Sports Properties Acquisition Corp. Announces Plan to Continue Business As a Taxi Medallion Acquiror and Manager
Press Release
Source: Sports Properties Acquisition Corp.
On 5:43 pm EST, Wednesday November 18, 2009
NEW YORK--(BUSINESS WIRE)--Sports Properties Acquisition Corp. (“Sports Properties”) (NYSE Amex: HMR), a public investment vehicle, announced today that it has signed a framework agreement with Medallion Financial Corp. (“Medallion”), which sets forth the steps Sports Properties will take to continue its business as a corporation that acquires, actively manages and leases taxicab medallions, operates on a selective basis, the taxicab fleets associated with those medallions and provides a range of services to the taxi industry. Sports Properties also intends to strategically seek new business opportunities in taxi-related operating businesses. The transactions contemplated by the framework agreement are expected to be completed prior to January 17, 2010, pending approval by Sports Properties' stockholders and warrant holders and subject to certain closing conditions. It is anticipated that, subject to stockholder approval, Sports Properties will change its name to Medallion Management, Inc.
Consummation of the transactions contemplated by the framework agreement are conditioned upon, among other things, the approval by Sports Properties' stockholders and warrant holders of certain amendments to Sports Properties' certificate of incorporation and warrants, respectively. Sports Properties' warrant holders will be asked to amend their respective warrants to, among other things, (i) increase the exercise price from $7.00 to $12.00 per share in exchange for extending the warrant expiration by three years to January 17, 2015, (ii) increase the price at which Sports Properties' common stock must trade before Sports Properties is able to redeem the warrants issued in Sports Properties' initial public offering in 2008 (the "IPO") from $14.25 to $18.75 and (iii) eliminate the cashless exercise feature of the warrants issued in Sports Properties' IPO. It is also contemplated that Medallion will cancel, prior to or upon the consummation of the transactions contemplated by the framework agreement, all of its shares acquired from Sports Properties prior to its IPO that it still holds. In addition, Sports Properties is in discussions with the underwriters in its IPO to reduce a portion of the deferred underwriting commissions.
Andrew Murstein, Vice Chairman of Sport Properties stated, "We looked at many opportunities over the last two years, but we believe this transaction in the taxi industry provides the best opportunity available for our stockholders. We believe that as a result of this transaction, we will be the only publicly traded company focused on acquiring and managing taxicab medallions. In major metropolitan areas of the United States, taxicabs are an integral part of the transportation infrastructure.”
“Taxi operations have shown significant resiliency in the face of challenging economic conditions. According to data published by the New York City Taxi and Limousine Commission, since 1995, New York City corporate taxi medallions, the transferable licenses needed to operate street hail taxicabs in New York City, have experienced an average annual appreciation of 17.63% and the average price of a New York City corporate taxi medallion was $767,000 at September 30, 2009. We believe that the existing regulatory systems and related economic factors in not only New York City, but in other cities as well, support the case for additional appreciation in the value of the licenses and for higher lease rates over time. Furthermore, we believe the taxi industry is very fragmented with no one owner owning more than 1% of taxis nationwide. This is a niche industry ripe for consolidation," continued Mr. Murstein.
Sports Properties' Management and Investment Team
Andrew Murstein will become Chief Executive Officer and continue as our Vice Chairman following consummation of the transaction. He has been in the taxi industry for more than 20 years and is the third generation in his family to be active in the industry. Leon Murstein, Andrew’s grandfather began his career in the taxi industry in 1937 when the City of New York sold 11,787 taxi medallions for $10 each. The City of New York did not sell any new medallions until 1996, and today only 13,237 taxi medallions are in existence. Mr. Alvin Murstein has agreed to serve as the Chairman of the Board of Directors following the consummation of the transaction. He has been in the taxi industry for over 45 years. Companies affiliated with Alvin Murstein and Andrew Murstein have lent more than $3,000,000,000 to the taxi industry.
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