Penske prepares to go public to fund the California Speedway.

February 1, 1996
Steve Lecomte
The Auto Channel
Motorsports Editor

In a bid to assist with the funding of a new motorsports facility in Fontana, California, Penske Motorsports Inc. has taken the first steps to go public.

Roger S. Penske is the founder and president of Penske Corporation a privately help transportation services company comprised of three business groups: Transportation Services, Retail Automotive and Automotive Performance.

The Automotive Performace groups' division - Penske Motorsports Inc. - which manages professional motorsports facilities - the Michigan International Speedway in Michigan and Nazareth Speedway in Pennsylvania and new facility in Fontana, California to be know as the California Speedway.

Penske Motorsports Inc. has filed a $55 million public offering with the U.S. Securities and Exchange Commission. Proceeds from the sale of 3.25 million shares of stock will help finance the California Speedway.

The initial filing will see each share of stock listed at either $17 or $18. The sale will cut Penske's ownership of the motorsports company from 84 percent to 50 percent.

The Michigan and Pennsylvania tracks are major venues for Championship Auto Racing Teams Inc. (CART), which stages the bulk of Indy-car races. Penske is a major team owner in the CART series with drivers Al Unser Jr. and Paul Tracy.

Both facilities also host NASCAR Winston Cup and Busch Grand National Division races each. Penske is a team owner in Winston Cup with driver Rudty Wallace. Penske has also become involved in the Craftsman Truck Series with Kenny Wallace and Rick Johnston as drivers.

The California Speedway has received confirmation from both CART and NASCAR that the new track will be granted dates to in the respective series.

The Penske stock offering is being managed by two major Wall Street firms, CS First Boston and Merrill Lynch & Co.

Besides the race tracks, Penske Motorsports also runs operations that sell racing tires and a merchandising unit that sells racing collectibles and apparel.

The California Speedway move to go public will help pay for an $80 million "superspeedway" being constructed 40 miles east of downtown Los Angeles. The speedway will have 68,000 seats and start conducting races in 1997.

Racing commentators have speculated the Los Angeles oval track could host future U.S. 500 races if that contest becomes an annual event opposite the Indianapolis 500. CART hasn't said whether there are plans for the new race beyond 1996.

Penske Motorsports is part of Penske Corp., which has annual sales of $5 billion. Other Penske Corp. properties include the publicly traded Detroit Diesel Corp., a maker of diesel engines.

Penske is following the same path Bruton Smith and Speedway Motorsports Inc. did a year ago when Speedway Motorsports Inc. went public.

Speedway Motorsports Inc., owns Charlotte Motor Speedway, Atlanta Motor Speedway, Texas Motor Speedway, a 50 percent share of the North Wilkesbore Motor Speedway and recently acquired Bristol International Raceway. The Charlotte, NC. based company shares opened at around $18 a share and currently trades for more than $30 per share.