March 5, 2010

They Issue Second Requests For Horseracing Mergers, Don’t They?

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

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