Canterbury Park Announces Business Restructuring to Facilitate Property Development
New Canterbury to be a Holding Company for and Parent Company of
Two Subsidiaries, Canterbury Park Entertainment and Canterbury
Development
Canterbury Park (Nasdaq: CPHC) announced that on October 2, 2015, the
Company’s Board of Directors approved a Plan of Reorganization to
reorganize and reincorporate the Company into a holding company
structure (the “Business Restructuring”). The Business Restructuring is
a key step in the future development of up to approximately 200 acres of
the Company’s underutilized property (“Development Land”), because it
will create the legal framework to enable the Company to separate its
regulated pari-mutuel wagering, card casino, concessions and other
related businesses (“Racetrack Operations”) from the Development Land.
The Business Restructuring requires shareholder approval, and on October
2, 2015, the Company filed preliminary proxy materials with the
Securities and Exchange Commission for a special meeting of shareholders
to approve the Business Restructuring. The Company expects the special
shareholders meeting will be held in late November 2015.
If approved by the shareholders, upon consummation of the transactions
contemplated by the Business Restructuring, the Company’s business will
be reorganized as follows:
-
A recently formed corporation, “New Canterbury” will be the public
company owned by the Company’s shareholders, and without the need to
take any action, each shareholder will have the same percentage
ownership in New Canterbury (and, indirectly, in all property and
other assets currently owned by the Company) immediately after the
Business Restructuring as that shareholder had immediately before the
Business Restructuring.
-
New Canterbury will be a holding company for and parent company of
two, recently formed subsidiaries, Canterbury Park Entertainment LLC
and Canterbury Development LLC.
-
Canterbury Park Entertainment LLC will be the surviving business
entity in a merger with the Company and will directly own all land,
facilities, and substantially all other assets related to the
Company’s Racetrack Operations, will conduct these businesses
consistent with current practices, and will be subject to direct
regulation by the Minnesota Racing Commission (“MRC”).
-
Canterbury Development LLC will continue the Company’s efforts to
commercially develop up to approximately 200 acres of land currently
owned or controlled by the Company that is not needed for the
Racetrack Operations. Canterbury Development will not be subject to
direct regulation by the MRC.
Canterbury Park also announced today that it has completed the sale of
an approximately six-acre parcel located at Vierling Drive East and
Eagle Creek Blvd for $1.43 million to Minnesota Municipal Power Agency
(MMPA). MMPA has begun the process of seeking the necessary state and
local approvals to develop a natural gas fired electric power generation
and production facility.
Canterbury Park CEO Randy Sampson stated, “The Business Restructuring,
along with our recent application to the City of Shakopee to plat and
subdivide all of the approximately 407 acres we own, are steps that will
give the Company the flexibility it needs to develop our underutilized
property. The proposed Business Restructuring will allow us to pursue
development of our underutilized land in a business entity that is not
subject to the direct Minnesota Racing Commission regulation that is
required for our Racetrack Operations. Also, conducting real estate
development in a separate entity will minimize the financial risk to our
Racetrack Operations that is inherent in real estate development.”
Sampson continued, “We believe the land sale to MMPA demonstrates our
opportunity to build shareholder value through the development of our
underutilized land, even though we have recently decided to change the
emphasis of our development plans. Because of information we recently
gained in our ongoing due diligence, rather than relocating our barn
area and pursuing a destination lifestyle retail development, we will
focus our immediate development plans to take advantage of opportunities
that do not require moving the barn area. We have changed our focus
because we determined the cost to move the barn area is too significant
an impediment to the financial viability of a large scale retail
development in that location at this time. As a result, we will now
pursue approvals necessary for apartments and business park development
as our first phases of development. We believe the dramatic job growth
underway in Shakopee has created an opportunity to develop a unique
multi-family residential community with a variety of apartment types and
attractive amenities at Canterbury Park. We will also continue to
explore the viability of a smaller scale project that would not require
a complete relocation of our barn area and possibly feature restaurants,
a hotel, a grocery anchor and other retail.”
About Canterbury Park:
Canterbury Park Holding Corporation
(NASDAQ:CPHC) owns and operates Canterbury Park Racetrack and Card
Casino, Minnesota’s only thoroughbred and quarter horse racing facility.
The Company recently concluded a 70-day live race meet. Canterbury
Park’s Card Casino hosts card games 24 hours a day, seven days a week,
offering both poker and table games. In addition, the Company conducts
year-round wagering on simulcast horse racing and hosts a variety of
other entertainment and special events at its facility in Shakopee,
Minnesota. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement:
From time to time, in press releases
and in other communications to shareholders or the investing public,
Canterbury Park Holding Corporation may make forward-looking statements
concerning possible or anticipated future financial performance,
business activities or plans based on management’s beliefs and
assumptions. These forward looking statements are typically preceded by
the words such as "believes," "expects," "anticipates," "intends" or
similar expressions. Shareholders and the investing public should
understand that these forward-looking statements are subject to risks
and uncertainties, including those disclosed in our periodic filings
with the Securities and Exchange Commission, which could cause actual
performance, activities or plans after the date the statements are made
to differ significantly from those indicated in the forward-looking
statements when made.
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