Saturday, April 4, 2009

Minor Details Bid for Most MEC Assets

Technology entrepreneur Halsey Minor said on April 3 that he has submitted a bid to Magna Entertainment Corp. under which he would buy substantially all of that bankrupt company’s assets except Gulfstream Park in Hallandale Beach, Fla.

Minor told The Blood-Horse that he submitted the proposal to MEC and to its bankruptcy court-appointed creditors committee on April 2. Minor said he is offering to buy approximately $200 million of MI Developments’ loans to MEC and to either purchase or reconstruct $225 million of MEC’s debt. MID is the controlling shareholder of MEC. Both companies are based in Aurora, Ont., with Frank Stronach as their chairman.

Minor first contacted MEC last October with offers to buy its MID loans. He said MEC never allowed him to begin due diligence on its operations. Published reports indicate that since MEC’s March 5 bankruptcy filing Minor is at least the third bidder, other than MID, for various MEC properties.

Minor, based in San Francisco, said that if his bid is accepted he would “have control” of as many as nine of MEC’s 10 North American race tracks. He said financing for buying the loans and bonds would come from a combination of his own equity and from other investors, whom he would not identify.

MEC on March 5 filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del. MID has made a “stalking horse bid” of $195 million to buy a package of several Magna properties that includes Gulfstream.

MEC has a $175 million loan from MID for redevelopment at Gulfstream that includes The Village at Gulfstream Park retail complex that is scheduled to open in February 2010.

“I feel that Gulfstream is not worth $175 million,” Minor said.

He said the new clubhouse/casino building that Gulfstream opened in 2006 has “a failed slots parlor” that he feels is a distraction from racing and said he expects the retail complex could be a “near-empty mall.”

Minor said he is not interested in Gulfstream because “I hope to have Hialeah (Park) in three or four years.”

Last year, Hialeah Park owner John Brunetti rejected an offer by Minor to buy the historic track in Hialeah, Fla. Neither would disclose Minor’s offering price. Hialeah Park last held Thoroughbred racing in 2001. Last month, the Florida Division of Pari-Mutuel Wagering issued Hialeah Park a permit to hold Quarter Horse racing. Florida laws require Hialeah Park to begin that racing by March 2010.