NEWS
MI Developments withdraws stalking horse bid
Posted: Monday, April 20, 2009 10:53 AM
by Frank Angst
One of the cornerstone proposals in bankrupt racetrack owner Magna Entertainment Corp. restructuring plan has been withdrawn.
Magna’s parent company, MI Developments Inc., had planned to submit a $195-million stalking horse bid on Magna properties including Golden Gate Fields, Gulfstream Park, the Lone Star Park lease, Palm Meadows Training Center, AmTote, and XpressBet.com. The plan had raised objections from minority shareholders at MI Developments as well as from Magna creditors.
MI Developments issued a release today that it would withdraw the stalking horse bid. The company still could bid on the individual Magna properties.
“MID’s principal concern with respect to the MEC Chapter 11 process is to maximize our recovery on our secured loans to MEC. We made our stalking horse bid because we believe that MEC owns some very valuable and attractive assets,” said MI Developments Chief Executive Officer Dennis Mills. “Although we continue to be interested in acquiring assets from MEC, we have agreed to withdraw our stalking horse bid in response to objections raised by a number of parties in the MEC Chapter 11 process and with the intent of expediting that process. As the process moves forward, MID will continue to evaluate all opportunities to preserve the value of our secured loans to MEC, which may include MID bidding for certain of MEC’s assets.”
With numerous objections to the plan, on Friday the court rescheduled today’s hearings on how it would solicit higher and better bids on the properties included in the stalking horse bid from today until May 7. With the withdrawal of the stalking horse bid, the court’s timeframe on setting these parameters could change.
Today the court is still scheduled to set parameters on the sale of Magna properties that had not been listed in the previous stalking horse bid, which include the Maryland Jockey Club properties and Santa Anita Park, along with Portland Meadows, Remington Park, and Thistledown.
The court also has scheduled hearings today on final terms of the debtor-in-possession financing facility. MI Developments announced several changes to its DIP proposal.
The company would like to extend the maturity date of the financing from September 6 to November 6 to allow for more time to sell Magna assets, reduce the principal from $62.5-million to $38.4-million, and give Magna until May 4 to file a motion on bid procedures relating to the asset sales.
The MI Developments board of directors approved terminating the stalking horse bid and amending the financing facility after considering, among other things, a recommendation from a Special Committee of independent directors.
Frank Angst is senior staff writer of Thoroughbred Times
