The U.S. Department of Justice is pulling hard on the reins to slow down a proposed merger between Churchill Downs, the famous racetrack home to the Kentucky Derby, and Youbet.com, an online horseracing gambling website.
The DOJ has issued the companies a “second request” under the Hart-Scott-Rodino Act for additional information on the proposed merger.
Second requests are rare, and dramatically increase the transaction costs associated with a merger. Some merger agreements even contain provisions that terminate the merger in the event of a second request.
That doesn’t appear to be the case in the Churchill Downs-Youbet.com merger, however. Churchill Downs’s CEO recently stated he expects the deal to finish the second quarter of 2010. Youbet.com has scheduled a special meeting of stockholders on April 6 to vote on the planned merger.
Categories: Antitrust Enforcement