Published on Sunday March 30 2008
By John Reynolds and Nick Webb
The privately owned horse breeding stables — the largest in the world — are worth “considerably in excess of €1bn. You’re perhaps looking at €3bn or €4bn. Certainly no more than €5bn,” a senior Irish corporate financier told the Sunday Independent.
Previous estimates of Coolmore’s value have indicated that the breeding behemoth was worth a mere €210m.
Last week the far smaller Ingham’s stud farm operation in Australia was bought by Sheikh Mohammed’s Darley Stud for around €270m. This deal has seen the valuation of Coolmore, with its global operations, skyrocket.
This would see Magnier comfortably join the ranks of the State’s billionaires. His wealth has also been boosted by a number of property deals in the UK and France, as well as investments in public companies including British pub group Mitchells & Butler.
“Although you’re talking about a huge price range, you have to consider the fact that Coolmore is a unique trophy asset, which would only really appeal to someone who could both afford to buy it and who also understands the horse breeding business,” said one industry player.
“The only people who could buy it are probably Middle-Eastern billionaires with a passion for horses,” he added.
It is estimated that the income from Coolmore’s Irish operations alone amount to €160m per year. It has 53 horses at stud, including Sadler’s Wells, who is said to earn the business about €200,000 for every foal he sires, according to racing sources.
It has been estimated that revenues from stallion nominations at the rival Ingham’s operation in Australia would be around €20.25m per year. The €270m price tag for the business would indicate a valuation of just over 13 times revenues. Although this is not a standard way to assess value, it would ascribe a worth of just over €2.1bn on Coolmore’s Irish breeding operations alone.
Home to Epsom and Irish Derby-winning stallion, Galileo, Coolmore also has extensive landholdings in Australia’s Hunter Valley in New South Wales, and some 2,500 acres of land at Ashford Stud in Kentucky, USA.
Here in Ireland, the Coolmore estate’s 2,000 acres in Fethard, Co Tipperary could be worth up to €65,000 an acre — or a total of €130m, according to a senior Irish horsebreeder who owns a number of studs.
Last week, Dubai’s Crown Prince Sheikh Mohammed bought Australia’s largest thoroughbred racing and breeding stables belonging to billionaire poultry businessman Bob Ingham and his late brother, Jack.
The Dubai ruler paid €270m for Ingham’s stud, and aims to knock Coolmore off the top spot as the world’s largest breeders of champion race-winners, according to horse breeding and racing analyst, Bill Oppenheim.
“He is gaining ground on them and has unlimited resources, whereas Coolmore has to operate on a business footing of some sort. He can buy Ingham’s because it helps to open up Dubai to trade and tourism from Australia,” he added.
Few major stud operations come on the open market, creating difficulties in assessing valuations. In 2005, the Aga Khan spent close to €45m buying up the Lagardere stud business in France.
“Coolmore is a private company and would never make any comment on the value of the business,” a spokeswoman for Magnier said.
Also on Independent.ie