Churchill's Attempt to Buy Maryland Tracks Falls Apart
Updated: Friday, February 22, 2002 10:07 AM
Posted: Friday, February 22, 2002 9:49 AM
An attempt by Churchill Downs in recent weeks to purchase Maryland's major racetracks has been derailed over issues of control, reported the Baltimore Sun
Joe DeFrancis, president of the Maryland Jockey Club that owns and operates Pimlico and Laurel Park, did not discuss specifics, but confirmed he had been negotiating with the Louisville-based racing conglomerate.
"Those discussions have not resulted in any transaction and are not ongoing," DeFrancis told the Sun
. The newspaper reported that Churchill Downs? president Tom Meeker and DeFrancis have discussed a possible deal for years. Negotiations intensified during December, but wavered until any pending deal finally fell apart. DeFrancis reportedly did not want to relinquish control of the tracks.
The deal would have been particularly valuable to Churchill by given them control of two-thirds of Thoroughbred racing's Triple Crown. Churchill Downs is home to the Kentucky Derby (gr. I), while Pimlico is host to the Preakness Stakes (gr. I), Maryland's largest annual sporting event.
Karl Schmitt, senior vice president of communications for Churchill, said it is company policy not to comment on potential acquisitions. He would only say the publicly held company is aggressively pursuing acquisitions and other business arrangements that fit into its strategic plan.
Churchill Downs owns six racetracks including Arlington Park, Hollywood Park, and Calder Race Course.
DeFrancis is reportedly seeking a buyer for a minority share in the two tracks held by LUK-Flatts, a subsidiary of the Leucadia National Corp. investment firm of New York. Leucadia owns 39% of the voting shares for Laurel and 42% for Pimlico. The firm also owns about half of the non-voting shares. Both Leucadia and DeFrancis, who owns the controlling share of the racetracks' stock, must be in agreement before Leucadia's share can change hands.
DeFrancis told the Sun
Churchill Downs is one of "several substantial entities" interested in buying a stake in the racetracks.
"While we are honored that such expressions of interest have been made, no transactions have occurred," he told the newspaper.
Magna Entertainment, the Canadian company that is Churchill's rival in racetrack acquisitions, is reportedly one of entities expressing interest in Maryland.
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