Travis Boats nearing merger with Tracker Marine

AUSTIN, Texas – Travis Boats & Motors, Inc. is in advanced negotiations to merge with its controlling shareholder, TMRC, LLP, a subsidiary of Tracker Marine, L.L.C, Travis reported yesterday evening in a press release.

As a result of the proposed merger, Travis would become a wholly owned subsidiary of Tracker Marine and would cease to be a publicly traded company. The remaining shareholders of Travis would receive cash in an amount not yet agreed upon, but expected to be approximately $0.40 per common share, the company said.

Officials at Travis indicated the proposed merger is being announced at this time based upon the advanced stage of the merger negotiations.

The proposed merger is subject to the negotiation and execution of a definitive merger agreement, and will require shareholder approval. Subject to SEC review of proxy materials, and to the approval of the merger by Travis' shareholders and by its senior lender, it is currently expected that the merger may close within approximately 90 days of this release.

Advanced negotiations began in mid-September
Travis has been considering strategic alternatives for some time, including merger and acquisition opportunities, aimed at maximizing shareholder value. After considering numerous alternatives with its financial advisor, Davenport & Co., L.L.C., in mid-September 2004 the company entered into advanced negotiations with Tracker related to the proposed merger, Travis said in its release.

Since that time, Travis and Tracker have actively pursued due diligence, as well as negotiations on the merger agreement and on the pre-merger and post-merger credit facilities with the company's senior lender, GE Commercial Distribution Finance Corp. The present credit facilities expired on Oct. 15 and Oct. 31, 2004. Subsequently, on Nov. 1, 2004, the company received a limited discretionary forbearance agreement from GE regarding its credit facilities, pending resolution of certain issues regarding the proposed merger.

On Nov. 2, 2004, the company received a Nasdaq Staff Determination Letter indicating that it would be de-listed from the SmallCap Market at the opening of business on Nov. 11, 2004 for failure to comply with Nasdaq Marketplace Rule 4350(d)(2)(A), which requires the company to have an audit committee of at least three independent directors.

Currently, the company's Audit Committee has only two members meeting the Nasdaq independence requirements. The third member on the Audit Committee is not considered independent due to his engagement as a consultant by the company.

Travis said it has been considering potential replacements on the Audit Committee who meet the Nasdaq independence standard, but a qualified candidate has not yet been identified.

In addition, on June 16, 2004, Nasdaq notified Travis that it did not comply with the $1.00 minimum bid price continued inclusion requirement set forth in Marketplace Rule 4310(e)(4), and the company was provided 180 days, or until Dec. 13, 2004, to regain compliance.

“The company is evaluating all of its alternatives, including an appeal of Nasdaq's de-listing determination,” Travis wrote in its press release. “However, while there can be no assurance that the merger will be completed, or as to its ultimate timing and terms, it is currently anticipated that a definitive merger agreement will be entered into with TMRC prior to the de-listing of the company.”

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