- Horse Racing - Fusaichi Pegasus tops $60 million

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Wednesday, June 28
Fusaichi Pegasus tops $60 million

LEXINGTON, Ky. -- Kentucky Derby winner Fusaichi Pegasus has been sold to Ashford Stud, the North American division of the global stallion operation Coolmore Stud, for a sum that is believed to be between $60 million and $70 million, easily topping the record price of $40 million paid for Shareef Dancer in 1983.

Fusaichi Pegasus
Kentucky Derby winner Fusaichi Pegasus is believed to have gone for between $60 and $70 million.
Fusaichi Pegasus is expected to campaign through the Breeders' Cup for owner Fusao Sekiguchi, who will not retain any ownership for breeding purposes. The colt will stand at Ashford in Versailles, Ky., and carry a stud fee in the $200,000 range.

"Coolmore made a substantial offer, and we have received confirmation that Coolmore's bid was the highest," Coolmore spokesman Richard Henry confirmed Monday. Henry said that Coolmore worked with Sekiguchi; Takahiro Suzuki, business manager of Sekiguchi's Venture Safenet company in Tokyo; Hawaii-based attorney Jim Clay; and Yukari Sekiguchi, Sekiguchi's daughter-in-law and racing manager. "A deal was signed with these people and is subject to the horse vetting out."

Asked about speculation that Fusaichi Pegasus's purchase price was between $60 million and $70 million, Henry said he could neither confirm nor deny the figure.

Coolmore's stiffest competition apparently came from agent John Ferguson, representing Dubai-based Sheikh Mohammed bin Rashid al-Maktoum, who wanted to race the horse, and Darby Dan Farm in Lexington, Ky. Others thought to be competitive during the bidding process - which involved interested farms faxing their bids to a four-person team headed by Sekiguchi - included Lane's End Farm of Versailles, Ky., Three Chimneys Farm in Midway, Ky., Pin Oak Stud in Versailles, Shadai Farm of Japan, and Juddmonte Farms of Lexington. People close to the bidding said that several of the farms collected partners in an attempt to raise funds to make a competitive bid.

Word that Coolmore had secured the horse came as little surprise to the bloodstock world. Coolmore principal John Magnier and major client Michael Tabor, who had teamed up with Satish Sanan, were the immediate underbidders when Sekiguchi purchased the Mr. Prospector colt at the 1998 Keeneland July auction for a sale-topping $4 million. And, as a global operation with branches in Ireland, Australia, and North America, Coolmore is one of the few farms that will have the ability to make the colt's purchase price financially viable by shuttling him, breeding him to substantial books of mares in the Northern and Southern Hemispheres.

The price shattered the previous high prices or syndicate values of other stallions, including Shareef Dancer's $40 million in 1983, Conquistador Cielo's $36.4 million syndication in 1982, and Lammtarra's $38.4 million syndicate value after his purchase by a partnership of Japanese breeders in 1996.

The sheer size of Coolmore's reported bid had bloodstock experts talking feverishly on Monday, but few seemed to consider it a sign of widespread inflation in the stallion market. Rather, they optimistically viewed the Fusaichi Pegasus sale as something of an aberration, the convergence of a wealthy, powerful operation and a horse generally perceived as special.

"It's a one-off situation," said Lexington bloodstock adviser Michael S. Brown. "It doesn't mean that the next Derby winner is worth $60 million. But there is industry consensus that this is a superb horse, and when you have that consensus, the market can go crazy."

"I don't think it's reflective of the nuts and bolts stallion market as we have historically known it," said Ric Waldman, an adviser to W. T. Young's Overbrook Farm, one of the stallion stations that had been in early discussions with Sekiguchi. "Maybe we're breaking new ground, but only time will tell... The seller had a special, desirable commodity for which there was unprecedented interest. I don't think this is going to force us to re-examine all levels of values on the stallion market."

Duncan Taylor, whose Taylor Made Farm submitted a bid that landed "down the list," concurred, but also pointed out that, for Coolmore's wide-ranging operation and quality of mares, the move "is not crazy from their perspective. They're looking at the long term, and they have a lot of nice mares. This horse has Mr. Prospector, Danzig, and Halo, and the Northern Dancer in him is far enough back in his pedigree, they can breed him back to a lot of their good Northern Dancer-line mares. It fits their overall program."

Still, financially, it's a bold move that undoubtedly will require dual-hemisphere shuttling, large books of mares, and good returns at the yearling sales, where, ideally, Fusaichi Pegasus's progeny would have to average between $300,000 and $400,000 to maintain the stallion's named value.

"If he does hit," Taylor said, "and he's standing for a minimum of $150,000, then $60 million is a heck of deal for the lifetime of a stallion."

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