CDI's Interest in Fair Grounds Stokes Stock
Updated: Tuesday, June 29, 2004 2:07 PM
Posted: Tuesday, June 29, 2004 11:24 AM
Shares of Churchill Downs Inc. neared its 52-week high during early trading Tuesday morning, the second business day following CDI's acknowledgement of its interest in purchasing Fair Grounds.
Shares in CDI reached $40.25 Tuesday morning, just shy of its 52-week high of $40.45 set Oct. 20 of last year. CDI announced Friday it would be the opening bidder, or "stalking horse," in a proposed bankruptcy auction for the assets of Fair Grounds. CDI's opening bid will be $45 million.
In a press release, CDI president Tom Meeker cited Fair Grounds winter racing dates and incoming slot machines as reasons for CDI's interest.
"We view Fair Grounds and CDI as a good strategic fit," Meeker said. "We are hopeful that we can create the best outcome for the New Orleans community, Fair Grounds' creditors, Louisiana horsemen, the racetrack's workers and customers, and out shareholders.
Fair Grounds identified CDI as a stalking horse in an amended Chapter 11 reorganization plan filed June 25. An original plan filed in April did not specify an opening bid from any group.
If the proposed auction is approved, it could be completed as early as Aug. 16. CDI would have until April 1, 2005 to close on the purchase of the track. CDI would need approval from the Louisiana Racing Commission to conduct live racing. The company would also need to receive state approval to operate slot machines at the track, which has already been approved by Orleans Parish voters.
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