Churchill Downs Incorporated ("CDI”) (NASDAQ: CHDN) and Youbet.com, Inc.
(NASDAQ: UBET) ("Youbet”) announced today that they have received
requests from the U.S. Department of Justice ("DOJ”) for additional
information and documentary material in connection with the parties’
proposed merger transaction. These actions, commonly referred to as
"second requests,” have the effect of extending the waiting period under
the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended
("HSR Act”), until 30 days after both parties have substantially
complied with the requests, subject to any modifications of the requests
to which the DOJ may agree. CDI and Youbet are in the process of
gathering information to respond to the second requests and are working
cooperatively with the DOJ as it reviews the merger.
On Nov. 11, 2009, CDI and Youbet announced their proposed merger by
which CDI would acquire all of the outstanding shares of Youbet, in a
transaction valued at approximately $126.8 million based on the Nov. 10,
2009 closing price of CDI common stock. The transaction is subject to
certain regulatory, shareholder and third-party approvals. Although no
assurances can be given as to the timing for the closing of the merger,
both companies expect the merger to close in the first half of 2010.
CDI, headquartered in Louisville, Ky., owns and operates four world
renowned Thoroughbred racing facilities: Arlington Park in Illinois,
Calder Casino and Race Course in Florida, Churchill Downs Race Track in
Kentucky and Fair Grounds Race Course & Slots in Louisiana. CDI operates
slot and gaming operations in Louisiana and Florida. CDI tracks are host
to North America’s most prestigious races, including the Arlington
Million, the Kentucky Derby, the Kentucky Oaks, the Louisiana Derby and
the Princess Rooney, along with hosting the Breeders’ Cup World
Championships for a record seventh time on Nov. 5-6, 2010. CDI also owns
off-track betting facilities, TwinSpires.com and other advance-deposit
wagering channels, television production, telecommunications and racing
service companies such as BRIS and a 50-percent interest in the national
cable and satellite network, HorseRacing TV, which supports CDI’s
network of simulcasting and racing operations. CDI’s Entertainment Group
produces the HullabaLOU Music Festival at Churchill Downs which
premieres on July 23-25, 2010. CDI trades on the NASDAQ Global Select
Market under the symbol CHDN and can be found at www.ChurchillDownsIncorporated.com
Youbet.com, Inc. (NASDAQ: UBET) is a leading domestic online horse
racing and horse betting site, the exclusive provider of live horse
racing footage and racing results to ESPN.com
and CBSSports.com and a leading
supplier of totalizator systems to the pari-mutuel industry. Youbet’s
website enables its customers to securely wager on horse races at over
180 racetracks each year worldwide from the convenience of their homes
or other locations. Through its online platform, Youbet offers members
real-time wagering, co-mingled track pools, conditional wagering
capabilities, high quality live audio/video, up-to-the-minute track
information, mobile wagering, race replay library, simultaneous X2 Video
multi-race viewing capability and sophisticated ROI-based player
analysis tools. In addition, through its United Tote totalizator systems
subsidiary, Youbet provides hardware and software to its track partners,
allowing them to process pari-mutuel wagers, issue and pay tickets, and
calculate payoff odds. Youbet’s website is: www.youbet.com
Forward Looking Statements
This communication includes "forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements may include, but are not limited to, statements about the
benefits of the proposed transaction, including future financial and
operating results, the combined company’s plans, objectives,
expectations and intentions. These statements are subject to a number of
risks, uncertainties and other factors that could cause our actual
results, performance, prospects or opportunities, as well as those of
the markets we serve or intend to serve, to differ materially from those
expressed in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a strictly
factual or historical nature and generally discuss or relate to
forecasts, estimates or other expectations regarding future events.
Generally, the words "believe,” "expect,” "intend,” "estimate,”
"anticipate,” "project,” "may,” "can,” "could,” "might,” "will” and
similar expressions identify forward-looking statements, including
statements related to expected operating and performing results, planned
transactions, planned objectives of management, future developments or
conditions in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future. Such risks, uncertainties and other factors include, among other
things: the possibility that the expected efficiencies and cost savings
from the proposed transaction will not be realized, or will not be
realized within the expected time period; the ability to obtain
governmental approvals of the merger on the proposed terms and schedule
contemplated by the parties; the failure of Youbet’s stockholders to
approve the proposed merger; the risk that the Company and Youbet
businesses will not be integrated successfully; disruption from the
proposed transaction making it more difficult to maintain business and
operational relationships; the risk that a significant licensing
agreement is terminated or not renewed; rising prices for content, the
possibility that the proposed transaction does not close, including, but
not limited to, due to the failure to satisfy the closing conditions;
the effect of global economic conditions, including any disruptions in
the credit markets; the effect of UIGEA regulations and/or the resulting
policies adopted by credit card companies and other financial
institutions; the effect (including possible increases in the cost of
doing business) resulting from future war and terrorist activities or
political uncertainties; the overall economic environment; the impact of
increasing insurance costs; the impact of interest rate fluctuations;
the effect of any change in our accounting policies or practices; the
financial performance of our racing operations; the impact of gaming
competition (including lotteries and riverboat, cruise ship and
land-based casinos) and other sports and entertainment options in those
markets in which we operate or are in close proximity; costs associated
with our efforts in support of alternative gaming initiatives; costs
associated with customer relationship management initiatives; a
substantial change in law or regulations affecting pari-mutuel and
gaming activities; our continued ability to effectively compete for the
country’s top horses and trainers necessary to field high-quality horse
racing; our continued ability to grow our share of the interstate
simulcast market and obtain the consents of horsemen’s groups to
interstate simulcasting; our ability to execute our acquisition strategy
and to complete or successfully operate planned expansion projects; our
ability to successfully complete any divestiture transaction; market
reaction to our expansion projects; the loss of our totalisator
companies or their inability to provide us assurance of the reliability
of their internal control processes through Statement on Auditing
Standards No. 70 audits or to keep their technology current; our
accountability for environmental contamination; the loss of key
personnel; the impact of natural disasters on our operations and our
ability to adjust the casualty losses through our property and business
interruption insurance coverage; any business disruption associated with
a natural disaster and/or its aftermath; the impact of wagering or other
federal or state laws, including changes in any such laws or enforcement
of those laws by regulatory agencies; the outcome of pending or
threatened litigation; changes in our relationships with horsemen’s
groups and their memberships; our ability to reach agreement with
horsemen’s groups on future purse and other agreements (including,
without limiting, agreements on sharing of revenues from gaming and
advance deposit wagering); the effect of claims of third parties to
intellectual property rights; the volatility of our stock price; the
impact of live racing day competition with other Florida and Louisiana
racetracks within those respective markets; a substantial change in
allocation of live racing days; changes in Illinois law that impact
revenues of racing operations in Illinois; the presence of wagering
facilities of Indiana racetracks near our operations; our ability to
execute on our permanent slot facility in Florida; the need for various
alternative gaming approvals in Louisiana; our ability to integrate
businesses we acquire, including our ability to maintain revenues at
historic levels and achieve anticipated cost savings; and the outcome of
any claims arising in connection with a pending lawsuit in federal court
in the Western District of Kentucky styled Churchill Downs Incorporated,
et al v. Thoroughbred Horsemen’s Group, LLC, Case #08-CV-225-S. See the
Company’s and Youbet’s Annual Reports on Form 10-K for the fiscal year
ended December 31, 2008 and other public filings with the Securities and
Exchange Commission (the "SEC”) for a further discussion of these and
other risks and uncertainties applicable to our businesses. Neither the
Company nor Youbet undertakes any duty to update any forward-looking
statement whether as a result of new information, future events or
changes in our respective expectations.
Important Merger Information and Additional Information
This communication is being made in respect of the proposed merger
transaction involving the Company and Youbet. In connection with the
proposed transaction the Company has filed with the SEC a registration
statement on Form S-4 that includes a preliminary proxy statement of
Youbet that also constitutes a prospectus of the Company. At the
appropriate time, Youbet will mail the definitive proxy
statement/prospectus to its shareholders. Before making any voting or
investment decision, investors are urged to read the definitive proxy
statement/prospectus when it becomes available because it will contain
important information about the proposed transaction. You may obtain
copies of all documents filed with the SEC regarding this transaction,
free of charge, at the SEC’s website (www.sec.gov),
by accessing the Company website at www.churchilldownsincorporated.com
under the heading "Investor Relations” and then under the link "SEC
Filings” or from the Company by directing a request to 700 Central
Avenue, Louisville, KY 40208. Alternatively, you may obtain copies by
accessing Youbet’s website at www.Youbet.com
under the heading "Investors Relations” and then under the link "SEC
Filings” or from Youbet by directing a request to 5901 De Soto Avenue,
Woodland Hills, CA 91367.
The Company and Youbet and their respective directors and executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding the Company directors and officers is available in
the Company’s proxy statement for its 2009 annual meeting of
shareholders and the Company’s 2008 Annual Report on Form 10-K, which
were filed with the SEC on April 28, 2009 and March 4, 2009,
respectively. Information regarding Youbet directors and executive
officers is available in Youbet’s proxy statement for its 2009 annual
meeting of stockholders and Youbet’s 2008 Annual Report on Form 10-K,
which were filed with the SEC on April 30, 2009 and March 6, 2009,
respectively. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests,
by security holding and otherwise, will be contained in the definitive
proxy statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
