Motor Sports Unit Blamed for Company's Profit Shortfalls

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NEW YORK ( -- Interpublic Group of Cos. announced it reached an agreement to sell its remaining racetrack holdings to newly formed U.K. group MotorSport Vision Ltd. The sale includes four U.K. tracks owned by Interpublic's Brands Hatch Circuits.

Terms of the deal were not disclosed, but Soundview Technology Group analyst Joseph Stauff noted the racetracks carry a $60 million book value on Interpublic's books.

Shedding motor sports division
Interpublic has been shedding parts of its former Octagon Motorsports unit as the agency holding company looks to clean up its balance sheet and reduce its debt load. The racing operation was blamed for several restatements of earnings and profit shortfalls in 2003.

Interpublic will continue to manage Formula One British Grand Prix races and a track in the U.K., which it handles under a lease contract but does not own. The Brands Hatch unit will be renamed Silverstone Motor Sport Ltd.

The sale is expected to help Interpublic's efforts to boost profitability and increase its share price, which had been battered by the advertising recession and a series of income restatements and federal investigations in the last two years. In a note to investors, Mr. Stauff said the sale "adds further evidence for the market to assess the new management team's ability to execute this turnaround."

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