Wednesday, January 6, 2010

Surprise: Good Guys Are Maryland Stalking Horse

I've learned on good authority that Blow Horn Equity LLC has emerged as the "stalking horse" bidder for the Maryland Jockey Club properties (Laurel, Pimlico and the Bowie training center) that will be sold at auction in bankruptcy court on January 21st. Frankly, that's the best possible news for Maryland racing, though it may not be enough to overcome the obstacles to success that Maryland politicians, Frank Stronach and the De Francis family have created through their collective mismanagement.

A "stalking horse" bid in this sort of auction is one that the seller -- in the case Magna Entertainment -- is committed to accepting, unless someone else shows up with a better offer at the time of the auction. The fact that Magna has accepted the Blow Horn bid at least averts the threat that Stronach himself would cobble together a bid at the last minute to try to hold on to Laurel and Pimlico.

As I reported earlier, Blow Horn, headed by Jeff Seder of EQB, Inc., is the only one of six reported bidders for the MJC properties that is likely to have the welfare of the Maryland horse racing and breeding industries as its primary concern. The other bidders are either interested in slot machines, or in converting the tracks into real estate developments. It'd be nice to have folks running the tracks whose primary interest is in racing.

Of course, the ongoing saga of the Anne Arundel county slot machine license still hangs over the MJC deal. As of now, devloper David Cordish has the license, and has zoning approval from the county legislature to go ahead with a slots palace at his Arundel Mills mall, up the road from Laurel. As has been widely reported, there's a powerful petition drive underway to have that zoning approval revoked, and a movement as well to go back to the beginning in the licensing process, so the new owner of Laurel, whoever that turns out to be, could make the sensible bid, supported by a cash deposit, that Stronach refused to make when the license was first put up for bids.

David Cordish could still come up with a bid that offers more cash than the "stalking horse" offer, since he might calculate that the value of Laurel as real estate -- rather than a race track -- and the profits he could make from his slots license, if it's not revoked, are worth more than the value of a pure race track play. But the Blow Horn team has been doing its homework, and certainly is prepared to put more into Maryland racing than any of the other bidders. Let's hope they get the chance.

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