Magna Entertainment Corp. has exercised its option, pursuant to an agreement with certain companies controlled by Joe De Francis and his sister, Karin De Francis, to acquire the remaining interest in the Maryland Jockey Club, which operates Laurel Park and Pimlico Race Course.
MEC acquired 51% of the MJC tracks in November 2002 in a deal valued at $117.5 million.
Under the terms of the option agreement, MEC will pay De Francis Entities $18.3 million plus interest for the remaining interest in the MJC. The purchase option was scheduled to expire in November.
“From the time we acquired control of MJC in 2002, we have intended to acquire the balance of the shares in the company,” MEC chairman and interim chief executive officer Frank Stronach said in a statement released Sept. 24. “The acquisition of this remaining interest in the MJC was specifically contemplated in our recently announced debt-elimination plan, and reflects our intent to focus the business of MEC on our core strategic racetracks. MJC is a core asset of MEC, and while Thoroughbred racing in Maryland is currently facing many difficult obstacles, we remain optimistic that with the assistance of other stakeholders, horse racing in the state can have a bright future.”
Pursuant to the initial acquisition arrangements, Joe De Francis and Karin De Francis will be leaving the MJC in the near future, though Joe De Francis will remain a director of MEC, which expects to continue working with him “in connection with matters of importance to MEC,” according to a release.
“On behalf of my sister and me, I want to thank Frank for the opportunities he has given us over these last five years,” Joe De Francis said. “We have both enjoyed working with MEC, and I look forward to continuing to contribute to MEC through my role on the board.”
Though legislation to authorize slot machines has repeatedly failed to win support from the Maryland legislature, it appears 2008 could bring another push. Penn National Gaming Inc. recently purchased Rosecroft Raceway, a Maryland harness track that is considered a lucrative site for gaming in the Washington, D.C., market.
The Maryland Thoroughbred tracks also are lucrative because the state is home to the Preakness Stakes (gr. I), the second leg of the Triple Crown.