German media group EMTV "will tomorrow announce it has
bought" a 50% stake in Bernie Ecclestone's Formula One
Administration (FOA), according to John Griffiths of
FINANCIAL TIMES. The deal, which "is understood to value
FOA at just over" $3.8B, has been structured to give
Ecclestone ongoing management control of FOA until a "likely
flotation" in two to three years. The deal also has EMTV
Chair Thomas Haffa negotiating the purchase of Deutsche Bank
venture capital subsidiary Morgan Grenfell Private Equity's
(MGPE) 12.5% stake in FOA for "more than" $470M, bought last
year for around $296M, and CA-based private equity group
Hellman & Friedman (H&F)'s 37.5% stake for about $1.41B.
H&F paid around $697M for the stake in February. EMTV is
"convinced that the twin prospects of rapidly rising
revenues from pay-per-view digital TV audiences for F1 and
its relatively under-developed merchandising potential
justify the premium EMTV is paying over the MGPE and H&F
acquisitions." The deal is also being completed in advance
of settlement of the EU Commission's long-running
investigation into F1 broadcasting rights (FINANCIAL TIMES,
3/20). In London, Chris Ayres writes that EMTV "believes it
can increase the profitability" of FOA "by concentrating
more heavily on" selling int'l PPV rights and developing
spin-off merchandise, such as video games. Ayres writes
that "it is thought" that both MGPE and H&F decided to sell
their stakes to EMTV "after coming to the conclusion that
they could not work together" as shareholders in Slec, the
holding company that controls FOA (LONDON TIMES, 3/20).
