Polaris Industries Inc. has entered into an agreement to sell approximately 1.38 million shares of KTM Power Sports AG to a subsidiary of KTM’s largest shareholder, Cross Industries AG, for approximately 58.5 million euros ($76.7 million).
The sale will be completed in two stages, with half the shares to be sold on or before March 15, 2007, and the other half to be sold on or before June 15, 2007. Polaris will retain ownership of approximately 340,000 shares, representing slightly less than 5 percent of outstanding KTM shares.
In connection with this agreement, Polaris and Cross also terminated the call option agreement entered into on July 19, 2005, effectively eliminating Cross’ option to purchase Polaris’ shares of KTM and Polaris’ option to purchase Cross’ shares of KTM.
“Our strategic partnership with KTM has been valuable for both parties since its inception and we expect this to remain true going forward,” said Tom Tiller, Polaris CEO. “However, given KTM’s decision to remain independent, we agreed that it would be in the best interest of both companies to accelerate the share ownership decision before the fall of 2007 when the call options would have become exercisable. We respect KTM’s decision to remain independent and look forward to furthering our strategic relationship with them in the future.”