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.
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