I’ll Have Another, whose chance to become the first Triple Crown winner since 1978 was derailed by a torn leg tendon, was sold to a Japanese breeder for $10 million because the top U.S. offer was about $3 million.

“The one offer was four times higher in cash than the best offer here,” owner J. Paul Reddam said yesterday in a blog posted on Bloodhorse.com. “I couldn’t rationalize not selling him overseas.”

Reddam bought the 3-year-old thoroughbred colt for $35,000 and I’ll Have Another won horse racing’s Kentucky Derby and Preakness Stakes before being retired the day before the Belmont Stakes because of a small tendon tear in his left front leg.

Reddam, a former philosophy professor who sold subprime mortgage firm DiTech Mortgage Corp. to General Motors Co. in 1999 for $240 million, last month opted to sell I’ll Have Another to Big Red Farm on the Japanese island of Hokkaido. He said he wrote his blog post in response to criticism that followed his decision to sell outside the U.S.

“Undoubtedly some folks would have kept the horse here despite the money,” said Reddam, the founder of CashCall Inc., a company that makes mortgage and short-term loans. “If the difference had been 2 million in valuation, I could have justified it, but it wasn’t, so I did what I did.”

Reddam said he received two written offers from American farms, one for $3 million and the other for $2.5 million. Big Red Farms offered $10 million and another Japanese farm made a bid for slightly less, Reddam said.
Stud Fee

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“Beyond that, however, it should be said that the American offer anticipated a stud fee of $17,500 to $20,000, which means that he wouldn’t get the best mares and thus wouldn’t be given the best chance to succeed as a stallion,” Reddam wrote. “In contrast, the Big Red offer means that he will get a much better book of mares, and thus be given a higher chance for success. I am hopeful that we can buy a few of those mares in foal and bring them back to California.”

I’ll Have Another won the Kentucky Derby on May 5 and the Preakness Stakes two weeks later. He was favored to become the first Triple Crown champion since Affirmed in 1978 before being scratched.

Reddam said the injury was similar to a tear in the seam of a pair of pants. While a person could keep wearing the pants and they might hold up a time or two, they’d eventually rip.
“Knowing this could happen, there was no choice but to scratch,” Reddam said, adding that the decision was made in less than a minute.