MINOR GOES PUBLIC ON MAGNA BID
Technology entrepreneur Halsey Minor has gone public with a letter sent to the Special Committee of the Board of Directors of MI Developments (MIM) asking the board to consider his proposal to acquire outstanding loans made by MI Developments to the financially beleaguered racetrack company Magna Entertainment (MECA).
Click here to read the letter.
Both MI Developments and Magna Entertainment are controlled by Frank Stronach, though Stronach owns just 2% of MI Developments.Both companies are offshoots of auto parts giant Magna International (MGA), whose stock price has declined by 67% over the last year.
On Thursday, Magna Entertainment received another extension on more than $250 million in outstanding loans, all but $40 million from MI Developments. The new agreement on a bridge loan from MI Developments added $15 million to the amount Magna Entertainment could borrow.
Minor, the founder of CNET and several other technology firms, said his proposal was made several weeks ago but that he has yet to receive a response from the Special Committee, necessitating the need to make the offer public so it could receive full consideration from shareholders of MI Developments.
“While it is unfortunate that we have to take the unnecessary step of making our proposal public,” Minor said, “we believe that MI Developments’ shareholders deserve to know about the opportunity to relieve the company of what has become an increasingly burdensome debt obligation. Magna Entertainment owns some of the world’s premier racetracks, but many of them have fallen into disrepair and are in desperate need of capital to both improve the facilities and attract fans back to the industry. I have long had a passion for the horse racing industry, and believe strongly that this storied, exciting sport can be revitalized. I want to help rebuild this industry, and initiating discussions with MI Developments to explore ways we can solve Magna Entertainment’s liquidity problem and help provide a better strategic direction to these under-capitalized properties is a winning proposition for MI Developments and the horse racing industry overall. I look forward to a response from MI Developments’ Special Committee.”
“Frank Stronach only owns 2% of MI Development but has been using that company to prop up Magna Entertainment, which has basically been a bankrupt company for three years. It only exists because MI Developments continues to put money into a company whose losses are in excess of $100 million a year.
“We have made a proposal, but the Special Committee of MI Developments hasn’t allowed us to have any access to any of the information, which is really crazy. They are depriving their shareholders of even knowing what our final offer will be. This will let the hedge funds who own the stock realize the company has been offered the opportunity to exit the Magna Entertainment funding business and so far has declined to even talk.”
Members of the Special Committee are Jerry D. Campbell (Chairman), Anthony J. Campbell and William J. Menear.
Copyright © 2008, The Paulick Report
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October 17th, 2008 at 8:52 pm
Can someone please ask Halsey Minor if he would look into trying to save Hollywood Park??? Is it already doomed or could it be purchased and still be available in 5 years when I might be able to see it. I want to tell my daughter about Seabiscuit, Native Diver, John Henry, and of course Lava Man, and show her that all of those greats plus uncountable more walked down that track. Stayed in that shedrow. Had their picture taken there. For a huge Horse racing fan who lives in a state where racing is ho-hum, saving Hollywood is a big deal.
Thank you
October 17th, 2008 at 9:04 pm
At some point, the shareholders in MI Developments are going to have a revolt at the amount of money Frank Stronach has been investing from MID in the money losing Magna ENtertainment. This sounds like Halsey Minor is giving the MI Developments board a reasonable way out of this mess. In so doing maybe the Magna tracks will be saved.
October 17th, 2008 at 9:17 pm
Take off, Mr. Minor, eh! You have has woefully neglected to address the ace up Mr. Stronach’s sleeve - an elixir that will not only ease the mind’s of Magna’s investors and save horse racing - but keep ecstacy soaked clubgoers bumping in the Great White North all night long . . .
http://www.franksenergy.com/
With product and marketing innovation like this, the racing industry looks poised to eventually take down the NFL as America’s #1 sport. Enjoy Eddie Murphy’s musical crown jewel wrap it’s tentacles around you as we experience MI grassroots marketing at it’s finest.
http://www.youtube.com/watch?v=BrskgOxDSDQ
In short, leiderhosen WILL save the sport of kings.
Signed,
A patient Magna Shareholder
October 18th, 2008 at 2:56 am
The gimmick stock split Magna pulled several months back demonstrated clearly that the company does not care one bit about shareholders and was a last move to keep those who have built this train wreck in influential - and very well compensated - positions. The vision Frank Stronach had more than a decade ago for North American racing is a failure for any number of reasons and Mr. Minor is the only voice of reason in this insane shell game that continues to goes on. One need only look to Thistledown in Ohio to see the Magna failure….that track once had live racing nine months a year and is slated for about 90 days in 2009. The sinking of a once viable racing venue into Lake Erie has been under the “leadership” of Magna.
October 18th, 2008 at 9:18 am
Remember when the industry trades fawned all over Frank Stronach and his grand vision for racing (1999-2002), accepting anything he said at face value even though a ton of it made no sense whatsoever? The Thoroughbred Times editorial staff was swooning all over itself as Frank spouted incomprehensible business theories, tortured the NTRA and generally held himself above the rest of the industry. “You’re dumb; it’s a club. I’m smarter. No more club. Yah.”
The new ruined-for-racing Gulfstream Park with the lowest performing Class 3 slots in the history of US gaming and innovative Frank’s Energy Drink beach parties will be his legacy to the game. That and he built a nice restaurant at Santa Anita. Let’s hope his mammoth ego doesn’t prevent someone like Minor from rescuing MEC from its painful impending bankruptcy.
October 18th, 2008 at 6:17 pm
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It takes more than passion and money!
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