Driving off the lot…

February 20, 2007

dsc08205.jpgSo many interesting things were dumped at the SEC late Friday that it was hard to figure out which one to lead with. But the merger proxy filed by Adesa (KAR) seems like a good place to start.

Regular readers probably recall that Adesa has been something of a frequent flier here at footnoted (see here and here) over some unusual related party transactions. On Dec. 22, the company announced that it was going private in a deal worth $27.85 a share. That news didn’t sit all that well with two of its largest shareholders — Royce Associates, which filed this 13-D on Jan. 30 and Gabelli & Co., which put out this press release a day later. Both think the company is worth more than the current price — between $33 and $35 a share.

A quick skim of Friday’s filing shows why Adesa’s top executives may have been so quick to accept a deal: they’ll be collecting lots of cash. Chairman and CEO David Gartzke, who doesn’t appear to be staying on, stands to collect the most: around $12 million, which considering his short tenure at the company, is pretty impressive. There was also this post-script. Jim Hallett, who left the company in May 2005 as part of the dust-up over his son, Sean, is coming back to the company. Sean claimed he was owed $6 million and the company counter-sued for $1.7 million. There’s no word in the filings on what happened to the lawsuit and counter-suit.

UPDATE: I’ve been rescheduled for CNBC on Wednesday morning @ 7:10 a.m. Same topic: CEO frequent fliers. Hope you can catch it!

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