Magna lassos Texas jewel

Mar 12, 2002 10:11 AM

Magna Entertainment Corp. (MIEC), the Ontario, Canada-based racing conglomerate, continued its push to industry leadership by acquiring Lone Star Park near Dallas, Texas, for approximately $100 million.

This will be the 11th track either purchased or leased by the company that was created by Canadian industrialist Frank Stronach, whose business plan has been to lasso as many tracks as possible and provide a year-round racing simulcasting menu.

Among the tracks operated by Magna Entertainment are Santa Anita, Golden Gates and Bay Meadows in California and Gulfstream Park in Florida. Since the bigger tracks primarily operate in the wintertime, Stronach was looking for a strong signal for the summer and fall periods. Lone Star’s thoroughbreds run from April to July while its quarter horse meet is conducted in October and November.

Lone Star Park Ltd. does not own the real estate on which it is located. That is the property of the city of Grand Prairie and is leased to the racing operators. The lease will expire in 2027.

Although Lone Star has about 50 investors in its partnership, about 70% is held by the family of Trammell Crow, an international real estate developer in Dallas.

Magna has agreed to pay the investors $80 million in cash and will assume $19 million in assumed liabilities.

On the corporate front, Magna announced it will offer 20 million shares of Class A stock for sale through underwriters Bear Stearns, BMO Nesbitt Burns and CIBC World Markets Corp. The offering originally was announced last October but was withdrawn because of poor market conditions.