SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(Amendment No. 2)
SCHEDULE 14D-1/A
Tender Offer Statement
Pursuant to Section 14(d)(1)of the Securities Exchange Act of 1934
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GLOBAL MOTORSPORT GROUP, INC.
(Name of Subject Company)
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GOLDEN CYCLE, LLC
(Bidder)
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COMMON STOCK, PAR VALUE $.001 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
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378937106
(CUSIP Number of Class of Securities)
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ROGER GRASS
GOLDEN CYCLE, LLC
ONE WYNNEWOOD ROAD, SUITE 100
WYNNEWOOD, PA 19096
(610) 642-8600
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
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COPY TO:
HERBERT HENRYSON II, ESQ.
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP
111 SOUTH 15TH STREET
PHILADELPHIA, PA 19102
(215) 977-2000
<PAGE>
This Amendment No. 2 amends and supplements the Tender Offer Statement on
Schedule 14D-1 dated April 7, 1998 filed by Golden Cycle, LLC, a Pennsylvania
limited liability company, to purchase all outstanding shares of Common Stock,
par value $0.001 per share (the "Shares"), of Global Motorsport Group, Inc., a
Delaware corporation (the "Company"), including the associated Preferred Share
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement dated as
of November 13, 1996 between the Company and American Stock Transfer and Trust
Company, as Rights Agent, at $18.00 per Share and associate Right, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 7, 1998 and the related Letter of Transmittal.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3(b) is hereby amended by adding the following:
On April 14, 1998, Alexander Grass, on behalf of the Purchaser, sent a
letter to Mr. Keenan. A copy of the letter is attached hereto as Exhibit (a)(9),
and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended by adding the following:
(a)(9) Letter dated April 14, 1998 from Alexander Grass to
Mr. Joseph F. Keenan.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 14, 1998
GOLDEN CYCLE, LLC
By: /s/ ROGER GRASS
--------------------------------
Name: Roger Grass
Title: Vice President
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<S> <C>
(a)(1) Offer to Purchase, dated April 7, 1998.
(2) Letter of Transmittal with respect to the Shares and Rights.
(3) Letter, dated April 7, 1998, from Jefferies & Company, Inc. to
brokers, dealers, banks, trust companies and nominees.
(4) Letter to be sent by brokers, dealers, banks, trust companies and
nominees to their clients.
(5) Notice of Guaranteed Delivery.
(6) IRS Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Press Release, dated April 6, 1998.
(8) Form of summary advertisement, dated April 7, 1998.
*(9) Letter dated April 14, 1998 from Alexander Grass to Mr. Joseph F. Keenan
(b) None.
(c) Letter agreement, dated March 6, 1998, between Jeffries &
Company, Inc. and the Purchaser.
(d) None.
(e) Not Applicable.
(f) None.
(g) Complaint filed by the Purchaser on April 2, 1998 in the Court
of Chancery of the State of Delaware.
(h) Complaint filed by the Purchaser on April 6, 1998 in the
United States District Court in and for the District of
Delaware.
(i) Complaint filed by the Purchaser on April 7, 1998 in the Court
of Chancery of the State of Delaware.
</TABLE>
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* Filed herewith.
Exhibit (a)(9)
GOLDEN CYCLE, LLC
4025 Crooked Hill Road
Harrisburg, Pennsylvania 17110
April 14, 1998
Mr. Joseph F. Keenan
Chairman of the Board
Global Motorsport Group, Inc.
16100 Jacqueline Court
Morgan Hill, California 95037
Dear Mr. Keenan:
I have your draft standstill agreement which you require we sign before
being afforded access to the same information that you are providing to other
parties who "may have an interest in acquiring the Company at a more attractive
price." The terms proposed in your confidentiality agreement, which require that
we terminate our tender offer, not commence our consent solicitation and not
make any proposals for the acquisition of Global for a period of two years, are,
as I am sure you anticipated, unacceptable.
Global's Schedule 14D-9 discloses that the Board has authorized the
Company's management "to preliminarily explore and investigate the desirability
and feasibility of various alternative transactions that might provide greater
value to the Company's stockholders than the Offer." We are convinced that
Golden Cycle is the best, if not the only, purchaser for Global and the
likeliest source of the highest value for Global's shareholders. We have
repeatedly sought to meet with you and your management and to obtain whatever
information Global possesses that would justify a price higher than our $18
offer. In response to our requests that you ensure a level playing field, you
have refused to provide information, without unacceptable conditions, or to
cooperate through discussions or negotiations in arriving at a transaction which
will provide a higher price for your shareholders. You also have manipulated the
corporate machinery in an effort to set a March 30 record date for a consent
solicitation that has not yet commenced. By doing so you are attempting to
disenfranchise those shareholders who acquired their interests after March 30 --
a considerable percentage of the owners of Global to whom you and your Board owe
fiduciary duties. In addition you have further attempted to interfere with
fundamental corporate democracy rights by seeking to limit the time available to
us to pursue our consent solicitation while you engage in a tactic of delay.
Although you say that your Board has not determined to sell the Company,
your Board publicly professes the objective of obtaining the best value for your
shareholders. The Board cannot achieve that objective without being fully
informed. And the Board cannot be fully informed without first providing us with
the same information that you are making available to third parties, including
banks and other financing sources, your investment bankers and your management,
and then obtaining our best offer.
<PAGE>
As you are well aware, we are in a dramatically different position from
any of the other bidders you might bring to the table. No other potential bidder
has invested as heavily in Global as we have or has made a specific offer to
acquire all of the Company's shares. To ask us to put in your Board's control
our offer to acquire Global, and our considerable investment in its stock, asks
a lot.
Frankly, you and your Board have not earned the kind of trust that is
required for us to even consider committing to the onerous terms of your
standstill agreement. Our information shows a pattern by your Board of secretly
diverting into its own pockets hundreds of thousands of dollars belonging to the
stockholders. For example, we are informed:
0 Lionel Allen, who you claim to be an "outside" director, is
being paid more than $90,000 a year for "legal consulting"
services -- in addition to the inflated $20,000 a year payment
and $8,400 a year medical plan he receives as a
"non-management" director. The consulting arrangement was
hidden from stockholders until we brought it out in a lawsuit
in the Delaware Chancery Court. Only then did you decide to
disclose it and even that disclosure omits mention of the
amounts he received in previous years. Placing Mr. Allen in
such a key role is particularly troubling given that he left
his former law firm amid allegations that he defrauded his
clients and his partners through inflated billing and expense
reimbursement claims and was reported to be subject to an FBI
investigation in connection with those allegations.
O Joseph Piazza, Sr., was elected Chief Executive Officer as
part of a plan to protect Mr. Allen's secret consulting
agreement. We are informed Mr. Piazza is in poor health and
that one of his first acts in office was to hire his son to a
senior sales position for which he is unqualified. We also are
informed that prior to being hired as CEO, Mr. Piazza
(ostensibly an "outside" director) also had a consulting
agreement worth more than $100,000 a year, in addition to his
$20,000 "non-management" director fee and medical benefits.
You have not seen fit to disclose Mr. Piazza's current salary,
or that of his son. The Company did disclose this week,
however, that Joseph Piazza, Jr., was awarded options to
purchase 25,000 shares only months after his father hired him.
O James Kelly, Jr., remains as Chief Financial Officer despite
having been terminated last year as a result of serious
performance concerns, replaced and then rehired with an
increase in compensation, all without disclosure to
shareholders. His continued presence as an officer and
director is part of the same machination to protect Mr.
Allen's consulting agreement.
O You became chairman after assisting Mr. Allen, Mr. Piazza and
Mr. Kelly in ousting the former Chairman, Ignatius Panzica.
We understand that on becoming Chairman, you paid yourself a
$50,000 fee -- also never disclosed to shareholders, together
with all other payments you get as a "non-management"
director.
<PAGE>
You and your Board have diverted these hundreds of thousands of dollars
- -- not to mention hundreds of thousands of options to purchase shares -- despite
perennially disappointing operating results and stock performance. Global's
14D-9 states that the "strength of the Company's management team" was one of the
factors considered by the Board in reviewing Golden Cycle's offer. Based on the
information available to Golden Cycle, we wonder whether that was a factor which
increased or decreased the value of the Company.
In every transaction there comes a time when the interests of the
shareholders and common sense dictate that personal considerations be put aside
and the matter be treated in a businesslike fashion for the benefit of
shareholders. We wait to see whether your Board will recognize that the time has
come.
We urge you to meet with us to negotiate a transaction at a price higher
than otherwise available to your shareholders from any other source. We
reiterate that it would be irresponsible for Global to take any action which
might create an impediment to our being able to offer the highest value to your
shareholders. Specifically, it would be inappropriate for the Global Board to
enter into any lock-up, break-up fee or stock option agreements or take any
unilateral corporate action, such as declaring an extraordinary dividend,
without availing itself of the opportunity to be fully informed as to the value
that could be obtained from Golden Cycle.
We hope you will see your way clear to respond promptly so that we may
work together in the best interests of all of Global's shareholders.
Very truly yours,
/s/ Alexander Grass
