No. 28

Meditrust Acquires Santa Anita Cos.

After months of declining attendance and questions about its long-term viability, the Santa Anita racetrack and its parent, Santa Anita Cos., got a new lease on life in November, when the firm was purchased by Meditrust, a Massachusetts-based real estate investment trust, for about $458 million.

When the deal was first announced in April, Meditrust Chairman Abraham Gosman said the REIT was committed to keeping horse racing alive at the Arcadia rack, even though horse-racing operations lost $7 million in the last quarter of 1996.

In fact, Meditrust was most attracted to Santa Anita for the racing company’s paired-share trading status on Wall Street.

One of the paired shares, which trade in unison on the New York Stock Exchange, represented the company that manages Santa Anita’s real estate operations, while the other represented its racing operations.

Under the paired-share status which Meditrust attained after the merger Santa Anita was one of only four real estate investment trusts nationwide allowed to own properties and also manage non-real estate businesses.

Gosman said Meditrust purchased Santa Anita because its paired-share status enables it to enter the operations side of the real estate business (such as building management) something it could not do as a REIT.