Filed pursuant to Rule 424(b)(3)
File No. 333-102889
PROSPECTUS SUPPLEMENT NO. 1
(To Prospectus dated May 16, 2003)
MAGNA ENTERTAINMENT CORP.
$75,000,000
7 1/4% Convertible Subordinated Notes due December 15, 2009 and
Shares of Class A Subordinate Voting Stock Issuable
upon the Conversion of the Notes
This prospectus supplement supplements the prospectus dated May 16,
2003 of Magna Entertainment Corp., relating to the sale from time to time by
certain of our securityholders (including their future pledgees, donees,
assignees, transferees or successors) of up to $75,000,000 aggregate principal
amount of our 7 1/4% Convertible Subordinated Notes due December 15, 2009 and
the shares of Class A Subordinate Voting Stock issuable upon conversion of the
notes. You should read this prospectus supplement in conjunction with the
prospectus, and this prospectus supplement is qualified by reference to the
prospectus, except to the extent that the information in this prospectus
supplement supersedes the information contained in the prospectus.
The table of selling securityholders contained in the prospectus is
hereby amended to update the information for the following selling
securityholders:
Number of Shares
of Class A
Aggregate Subordinate
Principal Amount Voting Stock That
of Notes That May May Be Sold Under Percentage of
Be Sold Under Percentage of this Prospectus Shares
Name this Prospectus Notes Outstanding (1) Outstanding (2)
- ------------------------------------ ------------------- ------------------ ------------------- -----------------
Credit Suisse First Boston $0 0% 0 0%
(Europe) Limited
Credit Suisse First Boston $30,125,000 40.167% 3,544,117 6.787%
Europe Limited
Shepherd Investments $0 0% 0 0%
International, Ltd.
Stark Trading $0 0% 0 0%
All other holders of the notes or $13,025,000 17.367% 1,532,352 3.052%
future transferees, pledgees,
donees, assignees or successors of
any such holders (3)
(1) The number of shares of Class A Subordinate Stock beneficially
owned and being offered, as set forth in the table, has been
determined in accordance with Rule 13d-3 under the Securities
Exchange Act, include shares of Class A Subordinate Voting Stock into
which the notes are convertible, and assumes a conversion price of
$8.50 per share of Class A Subordinate Voting Stock and the payment
of cash in lieu of fractional shares. In addition, the conversion
price of the notes may be adjusted under certain circumstances which
will change the number of shares of Class A Subordinate Voting Stock
received upon their conversion. See "Description of the Notes -
Conversion of the Notes" in the prospectus.
(2) Calculated based on Rule 13d-3(d)(i) of the Securities Exchange Act,
using 48,674,796 shares of Class A Subordinate Voting Stock
outstanding as of March 17, 2003. In calculating this percentage for
each holder, we treated as outstanding the number of shares of
Class A Subordinate Voting Stock issuable upon the conversion of all
that holder's notes, but we did not assume conversion of any other
holders' notes, or include any other shares of Class A Subordinate
Voting Stock that may be held by such holder. Does not include shares
of Class A Subordinate Voting Stock that may be issued by us upon
redemption or purchase of the notes by us at the option of the holder.
(3) Information concerning other selling securityholders not listed in the
prospectus (as amended or supplemented), including current holders of
the notes for which we have not received information regarding their
holdings, will be included in further supplements to this prospectus,
if required. For purposes of this table, we have assumed that any
other holders of the notes, or any future pledgees, donees, assignees,
transferees or successors of any other such holders of the notes, do
not beneficially own any other shares of Class A Subordinate Voting
Stock, other than the shares of Class A Subordinate Voting Stock
issuable upon the conversion of the notes.
Investing in the notes or shares of our Class A Subordinate Voting
Stock involves risks that are described in the "Risk Factors" section
beginning on page 3 of the prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT, AND ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus supplement is October 14, 2003.