After Asphalt & Rubber broke the news about the MV Agusta purchase last week, many of the details about Harley-Davidson’s sale of MV Agusta to the Castiglioni were known or rumored at the time of the purchase’s announcement later in the day; however the exact figures and terms of the agreement were not officially known. Having filed the appropriate forms with the SEC, Harley-Davidson (a publicly traded company) has had to disclose the terms of MV Agusta’s sale, which don’t paint a favorable picture for the Milwaukee brand, but show how Castiglioni “bought” his company back despite bids coming from other parties.
There has to be a bevy of high-fives going on in Milwaukee right now, as Harley-Davidson has finally unloaded MV Agusta from its holdings (we broke the news on the purchase earlier this morning). Harley-Davidson bought MV Agusta for $109 million back in 2008 (most of which was bad debt), and now just a little over two years later is making a tidy profit of…well, nothing. After wiping the books clean, investing in new infrastructre, and getting MV Agusta back on track with an all new model line-up (with a bike on the way), Harley-Davidson saw a paltry sum of €1 cross its desks. Harley-Davidson shares are down 3.5% as of this writing.
Instead Harley-Davidson is calling things even with the Castiglioni family, who would have seen a stock pay-out had the company exchanged hands with another buyer, like TPG for instance. The Castiglioni’s stock was worth somewhere between €20-€30 million, and now with 100% ownership, the Italians are free to once again run MV Agusta into the ground, just like they did leading up to 2008.
Harley-Davidson & MV Agusta press releases are after the jump. One interesting point of note that taking the helm of MV Agusta is former Ducati General Manager and Chief Engineer Massimo Bordi. Bordi was once offered the job of CEO at Ducati, but turned it down, and the position was filled by Gabriele del Torchio, Ducati’s current CEO. Bordi’s last item of business at Ducati was trying to sell the Italian brand to Harley-Davidson, which makes for some good irony in today’s announcement.
Expected to be closed within hours, Harley-Davidson is on the verge of selling MV Agusta to Claudio Castiglioni. Castiglioni was able to leverage the purchase of MV Agusta by using the funds that would have been generated by his stock buy-out, which is rumored to be between €20 – €30 million. Castiglioni is today’s big winner in the deal, as the Italian is basically buying back the company he sold to Harley-Davidson for pennies on the dollar, while Harley-Davidson is left holding the tab on a hefty purchase price and cash infusion into the Italian company.
Harley-Davidson has announced its Q1 quarterly earnings today, and the Milwaukee-based company posted a $68.7 million profit. This news comes after Harley-Davidson posted a $218 million loss last quarter, and finished in the hole over $55 million for the 2009 year. Harley’s return to profitability is partially due to the company’s restructuring of its financial services, which are once again generating money for the iconic American brand. Harley-Davidson Financial Services posted a profit of $26.7 million this past quarter, almost a third of HD’s net income in Q1.
Yamaha Motors is set to raise $812 million in capital in order to pursue development and production of fuel-efficient engines, which includes hybrid and electric models. The focus of this new range of Yamahas seems to be destined for emerging markets, but may include technologies that could trickle into more established markets like the United States. Yamaha plans on raising this money by making 63.25 million more corporate shares publicly available for investment.
After crowdsourcing their rule book, TTXGP has set another unprecedented move in racing by allowing teams to own up to 70% of the series itself. The union (TEO), as TTXGP calls it, will be transfered stock in in TTXGP Ltd, the company behind the TTXGP series. Teams then who comprise of the TEO membership will be award individual “units” of TEO based on the number of races the teams enter and their position in the standings.
For 2010, 30% of TTXGP Ltd. will be transfered to TEO, and the goal is to have 70% of the company up for grabs by 2020. TEO will have a considerable amount of sway in how TTXGP is run, thus creating a more open atmosphere for the direction of the series. The move to give teams a vested interest like this also serves to encourage more participation in the series. More after the jump.
As we reported last week, there were rumors circulating that Bajaj was poised to take a controlling interest in KTM, which could see the Indian manufacturer owning up to 90% of the Austrian company. After the circulation of these rumors KTM released a statement (posted after the jump) that touched on some of the issues brought about by the weekend’s news coverage, namely the future ownership structure of the company.
Some publications have taken this release as a denial of the acquisition rumors (which the release at no point actually says), but like many press releases what is said is often less important that what isn’t said. Sensational headlines aside, KTM’s response only suggests that CROSS Industries AG will remain the majority shareholder in KTM, and in no way denied rumors that Bajaj would be increasing its stake in the Austrian company. While CROSS and KTM’s current leadership seem set to remain intact at KTM (what was actually stated in the release), our sources continue to point to Bajaj increasing its stake in KTM, while the company’s glaring omission to address that part of the industry rumors seems to confirm that initial suspicion.
With KTM’s shareholder general assembly only two weeks away, we won’t have long to wait to see how the over $40 million of additional stock gets spread out over current and potential investors. Press release after the jump, for you to make the call yourselves on what was said.
Rumors are indicating that KTM has invited Indian manufacturer Bajaj to increase its stake in the Austrian company from the current 30% to up to 90%. While neither party has confirmed the news, it is reported that Bajaj has accepted KTM’s offer, and will immediately purchase an additional 21% of the company’s stock, making it a 51% majority shareholder. Bajaj will then increase its ownership to 90% at a later undecided time.
UPDATE 2: American Chopper is back as American Chopper: Senior vs. Junior.
Even with Paul Jr. and Mikey off of the show American Chopper, Paul Teutul Sr. has found a way to fight with his children, and further estrange himself from his family. Paul Sr. has filed a dispute with the Supreme Court of New York state (the State’s lowest court), which alleges that the elder Teutul has the right to purchase his son’s stock in Orange County Choppers Holdings, Inc., the company behind OCC.
It’s been a rough outing in the stock market for Harley-Davidson recently as in the past 10 days the company has seen to substantial hits to its stock price. First the company was hit by the news that it would be recalling over 110,000 motorcycles for faulty fuel tank mounts. And now, the latest bad news comes in the form of a downgrade by financial powerhouse Goldman Sachs, which has downgraded their opinion of Harley-Davidson from “neutral” to “sell”. More after the jump.