Press release December A LOOK BACK AT THE ARQANA

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					Press release                                                                   18th December 2008




                A LOOK BACK AT THE 2008 ARQANA SALES SEASON
                        … AND A LOOK AHEAD AT 2009



                  Another year of multiple Gr.1 success for ARQANA graduates


On the flat: 2 Classics, 10 Gr.1 trophies and some highly promising juveniles

Selling Gr.1 winners remains our ultimate goal. 2008 was another successful year for ARQANA in
this respect, with each of our eight sales sessions dedicated to flat horses delivering at least one
Group/Grade 1 horse.

ARQANA graduates won a total of 35 Group events in 2008. The scope of these successes stretched
from France, continental Europe, the UK and Ireland to Hong Kong and the USA. Price tags also
show an extremely wide range, from €26,000 to €280,000 (see Annex 1).

The Classic victories of NATAGORA (1000 Guineas) and VISION D’ETAT (French Derby) were
particularly special to our young sales company. They were respectively purchased for €30,000 and
€39,000.

Over jumps: top class hurdlers and chasers at all prices

The 2008 roll of honour of ARQANA graduates over jumps features 16 Graded winners headed by
the Gr.1 triumphs of J’Y VOLE and TAMARINBLEU, PIERROT LUNAIRE who took the Gr.2 Top
Novices’ Hurdle at Aintree, and MONKERHOSTIN who landed the Gr.3 Sandown Gold Cup.

The four of them illustrate the many sources of talented jumpers offered by ARQANA: J’Y VOLE
was purchased as a horse in training from the dispersal of Thomas Trapenard’s stables,
TAMARINBLEU cost the equivalent of €15,000 as an October yearling, PIERROT LUNAIRE was
snapped up by Highflyer Bloodstock for €100,000 at the Autumn Sale in Saint Cloud from the yard of
Nicolas Clément while MONKERHOSTIN was offered as a store at the Saint Cloud Summer Sale and
knocked down to the FIPS agency for the equivalent of €17,000.
                                        2008 sales assessment


    •   Annual turnover down only 13%

ARQANA’s turnover for 2008 is down only 13% and remains up on 2006, which was a vintage year.
This figure compares favourably with the drop of 30% to 45% suffered by many sales companies. The
August Yearling Sale saw its aggregate rise by 7% in an unfavourable environment, while later
sessions proved admirably resilient to the global financial turmoil. (See Annex 2)


    •   Share of the European yearling market increases by 7 points

The cumulated aggregate for the August, October and December yearling sales remained stable on
2007, a remarkable performance considering the economic and financial crisis that hit the
thoroughbred market by storm from September onwards. It allows ARQANA to increase its share of
the European yearling market by 7 points in one year, from 16% in 2007 to 23% in 2008.
Over three years, it represents an impressive gain of 11 points. (See Annex 3)

The August Yearling Sale, ARQANA’s flagship event, set a new record turnover of over
€40,000,000 (including private sales). It also witnessed particularly solid trade at the highest level,
with 26 lots being knocked down for over €300,000 to 13 different buyers, including several
newcomers: Prince Mithab of Saudi Arabia (buying under the acronym SKAS), Italian trainer Bruno
Grizzetti for a new client, BLM Bloodstock for Australian giant Patinack Farm, investing in its first
Northern Hemisphere yearlings etc.

The boutique format and strict selection process leading to a select catalogue with global appeal
appear to have played a major role in the success of the 2008 renewal.

It is also worth pointing out that 34 stallions saw their highest priced yearling sell at Deauville. They
are headed by GALILEO, whose son out of Listed scorer Olimpic Girl topped the August Yearling
Sale at €770,000, ROCK OF GIBRALTAR, whose full-sister to Red Rocks fetched €650,000,
DALAKHANI and CAPE CROSS, both on bids from John Ferguson. (See Annex 4)


                              Key factors in ARQANA’s performance


ARQANA President Eric Hoyeau is keen to explain that such a satisfactory performance is primarily
down to two factors: the healthy funding system with which French racing is blessed, and the
relentless efforts ARQANA, its team of overseas representatives and the FRBC have invested in
promoting the Deauville and Saint Cloud sales to an ever wider audience.

    •   The healthy fundamentals of the French racing and breeding industry

The vitality of the French market is a direct consequence of the way French racing and breeding is
funded. The PMU contributes a fixed 8% of the betting handle to the industry, which covers 80% of
racing’s funding. Consistent growth of the betting turnover have allowed for a regular increase of
French purses over the past decade. Breeders’ and owners’ premiums also pay a major contribution to
the finances of French professionals.
Overall prize money in France and PMU turnover in € millions

Year                                 2004            2005           2006           2007
PMU turnover                         7,560           8,010          8,110          8,840
% variation                          +8%             +6%            +1%            +9%
Total prize money                   138.33          145.04         152.19         158.70
% variation                          +5%             +5%            +5%            +4%
Total premiums (breeders             50.65           51.50          51.50          57.67
+ owners

Despite the trying economic context, France Galop has announced that overall prize money will be
increased by 0.5% in 2009.

    •   Progressive deployment of an efficient network of overseas representatives and
        cooperation with the FRBC

In a bid to strengthen up its international network, ARQANA has appointed several new overseas
representatives whose role is to raise the profile of ARQANA in their respective area and act as a first
port of call for local thoroughbred professionals.

Representatives appointed in 2008 are:

    •   Damon GABBEDY in Australia
    •   Beatrix MULHENS-KLEMM in Germany
    •   Cem OZYIGIT in Turkey
    •   Tony LACY in North America

This enhanced network will enable ARQANA to nurture close contacts on those key markets, whose
growth potential was hinted at by several events in 2008: Turkish breeders took home 19 lots from the
December Breeding Stock Sale; Australian investors were active both at the August Yearling Sale and
December Sale; leading US consignors Taylor Made, Hill ‘n Dale and Airdrie Stud enjoyed great
success with their first venture into selling yearlings at Deauville August, while Brookdale Farm and
the American-Australian “Astronomer Royal Syndicate” were first time buyers in December; finally
German trainers and breeders represented a significant share of the vendors at both the Arc Sale and
the December Sale.

Such positive results are also reflections of the brilliant promotion and assistance job carried out by
the FRBC (French Racing and Breeding Committee), who will continue to be a precious ally for
ARQANA in 2009.


                            Continuity and intensification ahead in 2009


ARQANA President Eric Hoyeau has laid out the 2009 strategy as follows:
“The strategy implemented by ARQANA since its set up in 2006 will prove a crucial asset in the
current context of dwindling demand and we shall definitely stand by it. We shall maintain the
emphasis on a rigorous selection at all sales in order to offer homogenous, quality catalogues of
sensible size as well as stick to the restricted format of our sales. Moreover we shall work as hard as
ever to raise the profile of our sales on a global scale and make all our clients feel as welcome and
comfortable as possible in our Deauville and Saint Cloud sales complexes.
The current economy is prompting us not to turn our methods upside down but to do more of the same.
Therefore there will be no major amendment to the sales calendar, with the exception of the Breeze
Up Sale. This sale will be positioned on the eve of the French Guineas in order to attract a wider
client base. It will also provide the youngsters with precious additional weeks of preparation.
Together with the FRBC and our overseas representatives, we will intensify our efforts to conquer new
markets abroad. Special emphasis will be put on emerging markets, without neglecting the French
client base.
Finally we will undertake significant improvement works on our Deauville sales grounds. A new yard
is already completed and will provide vendors and buyers with a quality environment to inspect
yearlings. Generally speaking, we shall remain committed to enhance the comfort of our clients at our
sales.

In these chaotic, unpredictable times, it is important to stress that the “dream factor” of our industry
remains unaltered. To win the Derby or the Arc is still an extremely powerful motivation for racehorse
owners, no matter how long they’ve been in the business for. Our mission is to nurture those dreams
in an intelligent way in order to bring new owners in and keep the existing ones happy. The quality of
French breeding, together with the consistent successes enjoyed by ARQANA graduates all over the
world should act as evidence that the dream is accessible”.




ARQANA Sales Dates 2009


Tuesday 17 February                        February Mixed Sale                     Deauville
Saturday 9 May                       Breeze-Up Sale (2yos in training)            Saint Cloud
Wednesday 1 July                Summer Sale (2yo and 3yo stores, horses in
                                    training and unraced flat 2yos)               Saint Cloud
Thursday 2 July
Friday 14 August
Saturday 15 August                                                                 Deauville
                                               Yearling Sale
Sunday 16 August
Monday 17 August
Thursday 1 October                        Pure-bred Arabian Sale                  Saint Cloud
Saturday 3 October                                Arc Sale                        Saint Cloud
Monday 19 October
Tuesday 20 October                             Yearling Sale                       Deauville

Wednesday 21 October
                                                                                  Saint Cloud
                                Autumn Sale (stores and horses in training)
Monday 16 November
Saturday 5 December
Sunday 6 December             Breeding Stock Sale (fillies, broodmares, foals)     Deauville

Monday 7 December
Tuesday 8 December                             Yearling Sale                       Deauville
                              ANNEX 1:
  2008 Group 1 winners and 2yo Gr.1 performers purchased at ARQANA
                               (flat only)




Sale                  Horse           Gr.1 Race          Purchase price    Purchaser
                      DOCTOR DINO     Hong Kong Vase             €38,000   MAB Agency
                      NAAQOOS         Prix      Jean-Luc       €280,000    Shadwell
August     Yearling                   Lagardère
Sale                  Jukebox Jury    2nd Racing Post          €270,000    Mark Johnston
                                      Trophy
                      Silver Frost    3rd      Criterium         €95,000   Charles Gordon-
                                      International                        Watson
October Yearling NATAGORA             1000 Guineas               €30,000   Patrick Barbe
Sale             SADDEX               Premio Presidente        €115,000    F.B.A.
                                      della Republica
December              VISION D’ETAT   Prix du Jockey             €39,000   Eric Libaud
Yearling Sale                         Club
                      BANNABY         Prix du Cadran             €75,000   MAB Agency
Arc Sale              Elusive Wave    2nd Prix Marcel          €660,000    Oceanic
                                      Boussac                              Bloodstock
Breeze up Sale        GRAND           Joe Hirsch Turf            €26,000   Jean-Claude
                      COUTURIER       Classic Hcp;                         Rouget
                                      Sword       Dancer
                                      Invitational S.
December              NAHOODH         Falmouth Stakes            €30,000Emerald
Breeding     Stock                                                      Bloodstock
Sale                  EQUIANO   King’s        Stand             €26,000 FIPS
                                Stakes
February Mixed Prince Siegfried 2nd      Criterium              €25,000 Peter Doyle
Sale                            International
                 NO RISK AL Dubai                               €60,000 Chantilly
                 MAURY          International                           Bloodstock
Purebred Arabian                Stakes (Gr.1 PA)
Sale             OUASSILA       Hatta                          €140,000 Chantilly
                 THABET         International                           Bloodstock
                                Stakes (Gr.1 PA)
                     ANNEX 2: sale by sale aggregate 2006-2008
                                    (including private sales)




In €
Sale                    2006     Variation          2007    Variation           2008
February Sale            426,200  +688%          3,357,100*   -66%              1,142,200
Breeze Up Sale         2,413,500  +36%            3,302,000      -              3,346,240
April HIT Sale           331,000   -37%             249,500   -16%                209,500
Summer Sale            3,940,000   +4%            4,090,300    -8%              3,771,000
August Yearling       29,772,000  +28%           38,032,500   +7%              40,749,000
Sale
Purebred               1,293,000     +100%        3,259,000      -61%           1,282,000
Arabian Sale
Arc Sale               5,496,000      -22%        4,285,000       -7%           3,994,500
October Yearling       8,619,500      +36%       11,740,500      -26%           8,671,000
Sale
Autumn Sale            3,652,500      -24%        2,762,500      -22%           2,159,000
December              18,171,060      +2%        18,561,000      -33%          12,361,500
Breeding Stock
Sale
December                 914,500      +61%        1,473,500       -8%           1,352,500
Yearling Sale
December HIT           2,346,000                           -                             -
sale **
TOTAL                 77,375,260     +18%        91,112,900      -13%          79,038,440


* Including Haras de Saint Pair du Mont dispersal, which returned an aggregate of €2,206,000.

** Including Thomas Trapenard dispersal
                              ANNEX 3: evolution of market shares
                               on the European yearling market




      2005 Market Share by Company                          2008 Market Share by Company
                                                                     1%
           3%
                                                                     2%                    ARQANA
       3%
                12%                  AFVPS                       3%                        GOFFS
      3%
                                     GOFFS                      2%         23%             DBS
                                     DBS                                                   TATTS UK
                                     TATTS UK                                              TATTS IRE
                        22%
                                     TATTS IRE                                             BBAG

                                     BBAG                                                  SGA
                                                          44%                  16%
49%                                  SGA                                                   ITS
                   8%
                                                                          9%
              ANNEX 4: stallions whose highest priced yearling of 2008
                               was sold at Deauville



STALLION                   PRICE      SEX   DAM                  PURCHASER
GALILEO                   770 000 €    m    Olimpic Girl         Le Metayer Bertrand BS
ROCK OF GIBRALTAR         650 000 €    f    Pharmacist           SKAS
MUHTATHIR                 570 000 €    f    Princesse d'Orange   Shadwell France
GREEN TUNE                540 000 €    f    Green Delight        Shadwell France
DALAKHANI                 500 000 €    m    Sara Moon            Ferguson John
CAPE CROSS                470 000 €    m    Hint of Silver       Ferguson John
ORATORIO                  400 000 €    m    Moonlight Dance      O'Byrne Mr
ANABAA                    380 000 €    f    Treasure Queen       MAB Agency
DUBAI DESTINATION         360 000 €    m    Sahara Sonnet        Ferguson John
VERGLAS                   360 000 €    m    Hidden Silver        Ferguson John
EMPIRE MAKER              350 000 €    f    You                  SKAS
SHAMARDAL                 350 000 €    m    En Public            Ferguson John
WHIPPER                   340 000 €    m    Flaming Song         Blanford BS
EL CORREDOR               300 000 €    f    Anja                 Doyle Peter BS
GIANT'S CAUSEWAY          300 000 €    f    Women Secret         De Burgh/Farrington
KING'S BEST               280 000 €    m    Holy Nola            Ferguson John
DISTORDED HUMOR           260 000 €    f    Molasses             SKAS
LANDO                     250 000 €    f    Fureau               Doumen François
KEY OF LUCK               210 000 €    f    Majmu                Vendeur
CHICHICASTENANGO          170 000 €    f    European Style       Nataf Paul
KENDOR                    170 000 €    f    Djayapura            MAB Agency
CAPTAIN RIO               150 000 €    f    Without Shoes        Broadhurst Agency
TOBOUG                    150 000 €    f    Halland Park Lass    Laffon Parias Carlos
HIGHEST HONOR             145 000 €    m    Restless Rixa        MAB Agency
JOHANNESBURG              145 000 €    m    Tulipe Royale        Nataf Paul
LINAMIX                   130 000 €    f    Street Maya          Vendeur
RAKTI                     130 000 €    f    Tocopilla            Moubray Mr
RANSOM O'WAR              115 000 €    m    Anna of Russia       Clément Nicolas
FANTASTIC LIGHT           110 000 €    f    Topline              BBA Germany
MESHAHEER                 110 000 €    f    Suvreta Queen        Roualle Jean de
ONE COOL CAT              100 000 €    f    Saraxa               MAB Agency
VINDICATION               100 000 €    f    Boubskaia            FBA
PEINTRE CELEBRE           85 000 €     m    Gaelic Bird          Doumen François