The state of Maryland has exercised its right to acquire the intellectual property associated with the Preakness Stakes and Black-Eyed Susan Stakes from 1/ST by matching an agreed purchase price of $85 million. A statute provides Maryland the right of first refusal when Preakness-related assets are offered for sale, requiring the Stronach Group to notify the state within 30 days of receiving a third-party offer it intended to accept, after which the state had 60 days to match the price. Jefferies analyst David Katz views the development as a modest negative for Churchill Downs shares, though he believes the opportunity to engage on redevelopment remains and that more meaningful positive catalysts exist. Jefferies maintains a Buy rating on Churchill Downs with a price target of $138, while shares closed at $88.27 on Friday.
Churchill Downs IncorporatedMaryland's acquisition of Preakness IP removes a potential acquisition target for Churchill Downs, limiting its ability to expand its racing portfolio.