SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 23, 2002
MAGNA ENTERTAINMENT CORP.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-30578 98-0208374
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(Commission File Number) (I.R.S. Employer Identification No.)
337 Magna Drive, Aurora, Ontario, Canada L4G 7K1
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(Address of Principal Executive Offices) (Zip Code)
(905) 726-2462
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if changed since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 23, 2002, MEC Lone Star, L.P. (the "Buyer"), a limited partnership
owned and wholly controlled by Magna Entertainment Corp. (the "Company"),
completed the previously announced acquisition of substantially all of the
operations and related assets of Lone Star Park at Grand Prairie. The
acquisition was completed pursuant to an Asset Purchase Agreement entered into
between the Buyer and Lone Star Race Park, Ltd. and LSJC Development
Corporation (the "Sellers"), dated as of March 6, 2002. Lone Star Park at
Grand Prairie is a Thoroughbred and American Quarter Horse racetrack located
near Dallas, Texas.
The acquired assets include the rights under a long-term lease of Lone Star
Park at Grand Prairie pursuant to a lease agreement with Grand Prairie Sports
Development Corporation ("GPSDC") and a related purchase option exercisable at
expiry in 2027. The GPSDC approved the assignment of the lease agreement on
September 16, 2002 and the Texas Racing Commission approved all other aspects
of the transaction requiring approval on October 16, 2002. The Buyer intends
to continue to use the acquired assets in the operation of Lone Star Park at
Grand Prairie.
The purchase price, after adjustments, of approximately US$100 million was
satisfied by the payment of
approximately US$81 million in cash and the assumption of certain liabilities,
including the Lone Star Park capital lease obligation of approximately $19
million. The Company paid the purchase price primarily from cash on hand and
partly through a draw on its credit facility with Bank of Montreal. The amount
of the purchase price was negotiated by the Company with the Sellers at arm's
length on the basis of the Company's analysis of the financial position,
profitability and future prospects of the business being acquired.
A copy of the press release announcing the completion of the transaction is
attached as Exhibit 99 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits Page
Exhibit 2 Asset Purchase Agreement dated as of March 6, 2002 among 4 - 65
MEC Lone Star, L.P., Lone Star Race Park, Ltd. and
LSJC Development Corporation. (The Exhibits to this
Agreement, which are identified in the list appearing at
the end of the Agreement, have been omitted but will be
furnished supplementally to the Commission upon request.)
Exhibit 2.1 First Amendment to Asset Purchase Agreement made as of 66
September 30, 2002
Exhibit 2.2 Second Amendment to Asset Purchase Agreement made as of 72
October 23, 2002.
Exhibit 99 Copy of the Company's press release dated October 23,
2002. 76
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MAGNA ENTERTAINMENT CORP.
(Registrant)
Date: November 6, 2002 by: /s/Gary M. Cohn
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Gary M. Cohn, Secretary