Magna to buy out Maryland Jockey Club

Magna Entertainment Corp. will exercise an option to purchase the shares of the Maryland Jockey Club that it does not already own, the company announced on Monday.

The transaction, which will cost Magna $18.3 million plus interest, will make Magna the sole owner of the Maryland Jockey Club, which owns and operates Laurel Park and Pimlico Racecourse. Magna purchased a 51 percent share in the MJC in 2002.

The remaining equity in the MJC is held by Joe and Karin De Francis, the son and daughter of the late Frank De Francis, who reached a deal to buy the MJC in the 1980s. As part of the 2002 deal, Magna had initially paid $18.3 million to Joe and Karin DeFrancis as an option to purchase their remaining shares, and will now pay the two an additional $18.3 million. The option was scheduled to expire in November.

According to a release from Magna, Joe and Karin De Francis "will be leaving MJC in the near future," although Joe De Francis will remain a director of the company. Joe De Francis is the president of Magna's PariMax unit, which owns and operates Magna's account-wagering operation, XpressBet; its 50 percent share in the television channel HRTV; and the bet-processing company AmTote.

Magna, the largest racetrack operator in the country, recently announced that it intended to aggressively pursue partnership deals for its existing racetracks as part of a plan to eliminate approximately $750 million in debt.

Maryland legislators are currently contemplating the legalization of slot machines at the state's racetracks and at other locations. In a release, Frank Stronach, the founder of Magna and the company's interim chief executive, called the MJC a "core asset" of the company.