No ‘stalking horse’ bid for Maryland tracks

Posted: 10:31 am Thu, November 12, 2009
By Liz Farmer
Daily Record Business Writer

The bankrupt owner of Maryland’s thoroughbred race tracks is moving forward in its auction of the tracks without selecting a leading bidder.

Magna Entertainment Corp. could not come to a purchase agreement Wednesday with the bidder it had selected as its “stalking horse bid,” an initial bid chosen by the company that competing bidders can bid against.

Ontario-based Magna was scheduled to file a motion Wednesday announcing its stalking horse bidder for its Maryland properties. But Miller Buckfire, the company handling Magna’s assets auction, will instead wait for the second round of bids for the properties to arrive next month.

Magna placed its Maryland properties (Pimlico Race Course, Laurel Park and Bowie Training Center) and properties in California and Florida on the auction block last month.

Michael Wildish, managing director of Miller Buckfire in New York, said they could not reach an agreement with an initial bidder that they felt was “deserving of a stalking horse” bid.

“Just because someone puts forward a bid doesn’t mean we have to take it,” he said Thursday. “They pushed our limits and they found them.”

Wildish said the auction can continue without a stalking horse bid, and the change should not affect the auction, which is scheduled for Jan. 8 in New York.

Magna had asked for initial bids to be submitted to Miller Buckfire by Nov. 2. The company was to select a stalking horse bid from those submitted. Those submitting a bid in the second round of bidding on Dec. 4 would have had the stalking horse bid as a benchmark against which to measure their own proposals.

The elimination of a stalking horse bid may push back the Dec. 4 due date for the second round, Wildish said.

He would not say who had been involved in the initial round of bidding, but said he believed several groups did not participate in that round because they were waiting to see what they’d have to compete against in the stalking horse bid.

“No one wants to show all their cards right now,” he said. “I think everyone wanted to see what everyone else was going to do.”

Baltimore area developer Carl Verstandig is known to be a party in an initial bid submitted for Magna’s properties, but Verstandig said the group heading up the bid had not been in talks with Magna this week. The bid included the Maryland properties and tracks owned by Magna in California and Florida also up for auction.

Baltimore developer David Cordish has also expressed his interest in bidding on Magna’s Maryland properties but a spokeswoman said the company was not commenting on its involvement at this time.

Joseph De Francis, a former owner of the tracks, said he did not submit an initial bid last week but also said he is keeping his eye on the Dec. 4 deadline.

To participate in the January auction interested parties must submit a bid by the second round’s deadline next month.