The Reuters News Service is reporting that owner-breeder Frank Stronach is working out a deal in which he would relinquish control of his real estate company in exchange for some of its racetrack assets.
Stronach, who holds a controlling voting stake in the company, MI Developments, is prepared to exchange his control of the $800 million real estate development company for some of its horse racing track assets, Reuters reported, citing two unnamed sources familiar with the deal.
The deal, which will swap his special voting shares in the company for the racing assets, is expected to get the support of some of the firm’s big shareholders like hedge funds Farallon Capital and David Einhorn’s Greenlight Capital, according to Reuters.
Under the deal, Stronach would no longer control the board, and a new board would be elected by the new shareholders, Reuters reported, noting that the sources asked not to be named because they were not authorized to speak with the media about the talks.
MI Developments shares rose 4.4% on the New York Stock Exchange and its Toronto Stock Exchange-listed stock was halted pending news.
Stronach, who is founder of auto parts company Magna International Inc., may still retain a smaller stake in the company after the deal, which could be announced as soon as this week and is expected to close by April 2011, one of the people said.
MID owns Santa Anita Park, Golden Gate Fields, Gulfstream Park (including an interest in The Village at Gulfstream Park, a joint venture with Forest City Enterprises, Inc.), The Maryland Jockey Club (Pimlico and Laurel) , Portland Meadows, AmTote and XpressBet, and through some of these assets, is a supplier, via simulcasting, of live horseracing content to the inter-track, off-track and account wagering markets.