EBR Sale Scheduled

[ReadyXB]

^ that would be very cool.

IDS posted a clever response today to this Hero story:

"...With the journalistic bar now set so low, Asphalt & Rubber feels comfortable reporting that there is indeed a new owner for Erik Buell Racing, but it is not Hero MotoCorp, but instead the Flying Spaghetti Monster — deity to the Church of the Flying Spaghetti Monster."

Yes! Finally, the truth comes out.

I have absolutely no idea about the who, what, when, or why of the potential buyer(s). I just thought it was a humerous post!

[buell-fan]

Note: The following is completely crazy and completely baseless and it will never happen, so you you don't need to tell me that. I already know. But I had some thoughts going through my head last night and I couldn't get them out, so I thought I'd type them out here.

Larry Pegram, until recently, was featured on a Velocity Channel show called Superbike Family. The Velocity Channel, since it's inception, has featured motorcycle themed programming including coverage of the Isle of Man TT.

The Velocity Channel is owned by the Discovery Channel. One of the Discovery Channels biggest stars is Jamie Hyneman of Mythbusters who owns an 1125R, knows Erik Buell and featured his bike on the show at least once (I think maybe more than that).

One of the Discovery Channel's biggest shows was American Chopper. Another big show for them is Gold Rush (a show that features people pursuing their dream to try to be successful gold-miners).

What if some people like Jamie Hyneman, Erik Buell, Larry Pegram, maybe someone like Jay Leno, Splitlath Racing, maybe some private investors etc. etc. etc. pooled their resources and bought EBR. And what if they did so in cooperation with the Discovery Channel who would get broadcasting and merchandising rights (I have to imagine Orange County Choppers T-Shirts made quite a bit of money at the height of the show). The Discovery Channel would sign on for a three-year term and offer to lend operating capital, if needed, over that time to ensure the company will be in business over that three year period. The Discovery Channel could then get several shows out of the deal - one that follows the efforts of EBR to get back up and running and successful, one that follows Larry Pegram as he puts a team together to go racing and maybe one that follows Splitlath Racing (and that one could be on Velocity).

I have a feeling those could be reality shows to end all reality shows. They wouldn't have to throw in a lot of fake drama because there would be real drama related to just doing the impossible task of getting a motorcycle company off the ground (starting with the auction), going racing, etc. I know I'd be glued to my TV every week.

Marketing would no longer be a concern. The shows would provide more marketing than any ad buys could ever provide.

I think that could be really, really cool.

Too bad it's completely crazy and won't happen.

Great, well thought out idea. If I had the money and knew people like that I would invest in this. As for marketing and advertising goes, this is the way a lot of those TV stations survive with their format: by making content-specific programming for a target audience. EBR is a truely viable company that just needs American backers and broader target-market advertising to get more sales going in the future.

[Hughlysses]

According to a couple of posts at Badweb, EBR owners have received a notification from the receiver that the auction has been re-scheduled for August 5 at 10 AM.

[Plotter]

Better late than never in most cases, but here I'd prefer never...

[Hughlysses]

Interesting news from multiple Indian sources this morning. They're claiming Hero has reached a settlement with the receiver to buy certain EBR assets (this source states it's EBR's consulting business), which I'm assuming would include all the stuff EBR was working on for Hero:

http://www.livemint.com/Companies/FD...-business.html

Here's a press release from Hero which seems to confirm this story:

http://www.moneycontrol.com/stocks/r...c-1282281.html

This would seem to be a pretty interesting development. $2.8M seems like a bargain price for this portion of EBR since it was stated Hero owed $20M for the work performed by this portion of EBR. I'm guessing the statement about "free and clear of all encumbrances" means in exchange for this sale, Hero relinquishes their 49% interest in the remainder of EBR?

[Scott]

Interesting news from multiple Indian sources this morning. They're claiming Hero has reached a settlement with the receiver to buy certain EBR assets (this source states it's EBR's consulting business), which I'm assuming would include all the stuff EBR was working on for Hero:

http://www.livemint.com/Companies/FD...-business.html

Here's a press release from Hero which seems to confirm this story:

http://www.moneycontrol.com/stocks/r...c-1282281.html

This would seem to be a pretty interesting development. $2.8M seems like a bargain price for this portion of EBR since it was stated Hero owed $20M for the work performed by this portion of EBR. I'm guessing the statement about "free and clear of all encumbrances" means in exchange for this sale, Hero relinquishes their 49% interest in the remainder of EBR?

This sounds like GREAT news to me. It sounds like Hero is extracting themselves and taking the things they need for their specific motorcycles. That 2.8 million reduces the debt and makes this more attractive to potential buyers while, presumably, leaving the key EBR assets available. I would also assume that in the negotiation of this deal, Erik would have ensured he had what he needed (the right, for example, to make a variation of the Hastur engine if that was in EBR's long range plans).

This also probably explains the previous report of Hero buying EBR - they probably just had the details screwed up.

Hero still may try to make a bid for the rest of the company next Wednesday, but they won't NEED to buy those assets the way they would have otherwise. This could very well be paving the road for the sort of outcome most of us are hoping for.

[Scott]

I suspect this also explains the delay in the auction. Hero probably wanted to lock their key assets up and now to prevent them from being available in the general auction.

Now anybody who is willing to spend approximately $17 million can purchase an operating sport-bike manufacturer.

I think that's a bargain by any reasonable estimate. If somebody started from scratch to try to get to where EBR is right now, I'd be willing to bet they'd have to spend close to $100 million and 5 years.

[Hughlysses]

Here's a link to a copy of Hero's press release confirming the deal. There's nothing on Hero Motocorp's website yet.

http://www.moneycontrol.com/stocks/r...c-1282281.html

I tend to think this means the Hero/EBR divorce has been finalized and that Hero got what they wanted and is out of the picture. NOW, if the right outfit will just buy the remainder of EBR...

[Scott]

Here's a link to a copy of Hero's press release confirming the deal. There's nothing on Hero Motocorp's website yet.

http://www.moneycontrol.com/stocks/r...c-1282281.html

I tend to think this means the Hero/EBR divorce has been finalized and that Hero got what they wanted and is out of the picture. NOW, if the right outfit will just buy the remainder of EBR...

I'm reluctant to assume they're out of the picture. If bidding tops out at a couple million, I think they'll snap it up for themselves.

But hopefully there are other interested parties that will ensure bidding gets to a level that Hero won't want to match. And now that they have what they need, they'll have less motivation to bid beyond a certain level.

[Hughlysses]

I guess we have to wait until next week to find out. Here's a link to a more-complete version of the settlement letter and press release:

http://www.moneycontrol.com/mccode/n...=2189221&num=0