EX-99.1
2
a05-15434_1ex99d1.htm
EX-99.1
EXHIBIT 99.1
Magna Entertainment Corp.
MEC ANNOUNCES
THE SALE OF COLONIAL DOWNS
337 Magna Drive
MANAGEMENT
ARRANGEMENT TO COLONIAL DOWNS, L.P.
Aurora, Ontario,
Canada L4G 7K1
August 18, 2005, Aurora,
Ontario, Canada and New Kent, Virginia - Magna Entertainment Corp. ("MEC")
(NASDAQ: MECA; TSX: MEC.SV.A) and Colonial Downs, L.P. ("Colonial LP")
today
announced that they have entered into an agreement under which Colonial LP will
acquire all of the outstanding shares of Maryland-Virginia Racing Circuit, Inc.
("MVRC"), a subsidiary of MEC. MVRC has
operated Colonial Downs, a thoroughbred and standardbred horserace track in New
Kent, Virginia, pursuant to a management agreement with Colonial LP in place
since April 1996. This management
agreement is MVRC's sole material asset.
The sale is subject to approval of the Virginia Racing Commission, which
approval the parties intend to request at the Commission's next regularly
scheduled meeting on September 7, 2005.
Under the terms of the agreement, Colonial LP will pay MEC, through its
subsidiaries, US$7 million on closing and US$3 million by way of one-year
interest-bearing demand note. Colonial
LP will also pay MVRC's prorated 2005 management fees and repay approximately
$145,000 plus accrued interest under an existing outstanding promissory note.
MEC will further participate with Colonial LP in certain new ventures in
Virginia, if and as they materialize.
"We have enjoyed a
lengthy and productive relationship with the team at Colonial Downs but this
sale of our management arrangement will enable us to continue to refocus our
resources on a strategic goal of delivering prime racing content, developing
our US gaming potential, and expanding our signal delivery and wagering
capability within North America and internationally", stated W. Thomas Hodgson,
President and Chief Executive Officer of MEC.
"We have agreed with Colonial LP that we will continue to have the use
of the Colonial Downs signal and we hope to include that signal within our growing
domestic and international distribution network".
Jeffrey P. Jacobs,
Chairman of Colonial LP, stated "We are appreciative of MEC for their hard work
in helping to grow Colonial Downs and we look forward to a continued
relationship with them and to building on the foundation that has been laid".
About Magna Entertainment Corp.
MEC is North America's
largest owner and operator of horse racetracks, based on revenue. It develops,
owns and operates horse racetracks and related pari-mutuel wagering operations,
including off-track bettering facilities. Additionally, MEC owns and operates
XpressBet
R
, a national Internet and telephone account wagering
systems, and Horse Racing TV™, a 24-hour horse racing television network, as
well as RaceONTV and Magnabet internationally.
About Colonial Downs, L.P.
Colonial Downs, L.P. is a
wholly owned subsidiary of Jacobs Entertainment, Inc., a geographically
diversified gaming and pari-mutuel wagering company with properties in
Colorado, Nevada, Louisiana and Virginia. Jacobs Entertainment, Inc. is owned by
the Cleveland, Ohio and North Palm Beach, Florida based Jacobs family. Colonial Downs, L.P. owns the Colonial Downs
racetrack in New Kent, Virginia and seven satellite wagering facilities located
across Virginia.
For more information contact:
For Magna Entertainment Corp.:
Brian J. Budden
Vice President, Corporate Development
Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario
L4G 7K1
Telephone: (905) 726-7076
Website: www.magnaent.com
For Colonial Downs, L.P.:
Ian M. Stewart
President, Colonial Downs, L.P.
10515 Colonial Downs Parkway
New Kent, VA
23124
Telephone: (804) 966-7223
Website:
www.colonialdowns.com

EX - 99 . 1 2 a05 - 15434 _ 1ex99d1 . htm EX - 99 . 1 EXHIBIT 99 . 1 Magna Entertainment Corp . MEC ANNOUNCES THE SALE OF COLONIAL DOWNS 337 Magna Drive MANAGEMENT ARRANGEMENT TO COLONIAL DOWNS , L . P . Aurora , Ontario , Canada L4G 7K1 August 18 , 2005 , Aurora , Ontario , Canada and New Kent , Virginia - Magna Entertainment Corp . ( " MEC " ) ( NASDAQ : MECA ; TSX : MEC . SV . A ) and Colonial Downs , L . P . ( " Colonial LP " ) today announced that they have entered into an agreement under which Colonial LP will acquire all of the outstanding shares of Maryland - Virginia Racing Circuit , Inc . ( " MVRC " ) , a subsidiary of MEC . MVRC has operated Colonial Downs , a thoroughbred and standardbred horserace track in New Kent , Virginia , pursuant to a management agreement with Colonial LP in place since April 1996 . This management agreement is MVRC 's sole material asset . The sale is subject to approval of the Virginia Racing Commission , which approval the parties intend to request at the Commission 's next regularly scheduled meeting on September 7 , 2005 . Under the terms of the agreement , Colonial LP will pay MEC , through its subsidiaries , US$ 7 million on closing and US$ 3 million by way of one - year interest - bearing demand note . Colonial LP will also pay MVRC 's prorated 2005 management fees and repay approximately $ 145,000 plus accrued interest under an existing outstanding promissory note . MEC will further participate with Colonial LP in certain new ventures in Virginia , if and as they materialize . " We have enjoyed a lengthy and productive relationship with the team at Colonial Downs but this sale of our management arrangement will enable us to continue to refocus our resources on a strategic goal of delivering prime racing content , developing our US gaming potential , and expanding our signal delivery and wagering capability within North America and internationally " , stated W . Thomas Hodgson , President and Chief Executive Officer of MEC . " We have agreed with Colonial LP that we will continue to have the use of the Colonial Downs signal and we hope to include that signal within our growing domestic and international distribution network " . Jeffrey P . Jacobs , Chairman of Colonial LP , stated " We are appreciative of MEC for their hard work in helping to grow Colonial Downs and we look forward to a continued relationship with them and to building on the foundation that has been laid " . About Magna Entertainment Corp . MEC is North America 's largest owner and operator of horse racetracks , based on revenue . It develops , owns and operates horse racetracks and related pari - mutuel wagering operations , including off - track bettering facilities . Additionally , MEC owns and operates XpressBet R , a national Internet and telephone account wagering systems , and Horse Racing TV ™ , a 24 - hour horse racing television network , as well as RaceONTV and Magnabet internationally . About Colonial Downs , L . P . Colonial Downs , L . P . is a wholly owned subsidiary of Jacobs Entertainment , Inc . , a geographically diversified gaming and pari - mutuel wagering company with properties in Colorado , Nevada , Louisiana and Virginia . Jacobs Entertainment , Inc . is owned by the Cleveland , Ohio and North Palm Beach , Florida based Jacobs family . Colonial Downs , L . P . owns the Colonial Downs racetrack in New Kent , Virginia and seven satellite wagering facilities located across Virginia . For more information contact : For Magna Entertainment Corp . : Brian J . Budden Vice President , Corporate Development Magna Entertainment Corp . 337 Magna Drive Aurora , Ontario L4G 7K1 Telephone : ( 905 ) 726 - 7076 Website : www.magnaent.com For Colonial Downs , L . P . : Ian M . Stewart President , Colonial Downs , L . P . 10515 Colonial Downs Parkway New Kent , VA 23124 Telephone : ( 804 ) 966 - 7223 Website : www.colonialdowns.com