07/14/2002 11:00PM

Magna reaches deal to buy MJC

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Magna Entertainment has reached a deal to buy a 51 percent stake in the Maryland Jockey Club for $69.0 million in cash, the companies announced on Monday.

The deal will give Magna majority shares in Laurel Park and Pimlico Race Course, the Baltimore track that is home to the Preakness Stakes, second leg of the Triple Crown. Under the agreement, Joe De Francis, the current chairman and president of the MJC, will have "full authority" over the MJC's operation, according to a press release about the deal released Monday morning.

The price includes two payments of $9.2 million to DeFrancis and his sister, Karin, for options to purchase their interests in the MJC four years after the deal closes. The options will expire after one year. If Magna exercises the options, Joe and Karin DeFrancis will receive an additional $18.3 million.

The deal allows DeFrancis to sever his ties with Leucadia National Corporation, a New York investment firm that bought a minority share in the MJC in 1998.

Officials at Leucadia have been dissatisfied with the investment, largely because the company anticipated that the MJC's tracks would receive slot machines from the legislature.

Magna is purchasing all of Leucadia's shares in the track, as well as that of Martin Jacobs, the MJC's general counsel. The transaction is expected to close in the fall this year, the release said.

Magna has been negotiating with DeFrancis for nearly six months. The company, which operates Gulfstream Park, Santa Anita Park, and eight other tracks, has been seeking a track that would give it racing dates in the second half of the year.

Laurel and Pimlico annually hold approximately 220 live racing days.

Magna also owns Golden Gate Fields, Bay Meadows Race Course, Thistledown, Remington Park, Great Lakes Dows, Ladbroke at the Meadows, and Multnomah Greyhound Park. It has a lease to operate Portland Meadows, and has reached agreements to purchase Lone Star Park and Flamboro Downs.