SBD/May 9, 2011/Leagues and Governing Bodies

CVC Has First Refusal To F1's Minority Shares, Likely Blocking News Corp. Bid

Ecclestone says he is 100% certain CVC does not want to sell F1 to News Corp.
News Corp. “cannot make a move to take over Formula One by buying out the sport's minority shareholders because private equity group CVC has first refusal on any stakes offered for sale,” according to Sylt & Reid of the GUARDIAN. News Corp. has "teamed up with Exor, an investment firm controlled by the Agnelli family, for a possible bid for F1.” CVC, which owns 63.4% of F1’s parent company Delta Topco, has confirmed it received a "friendly" approach from News Corp. Deputy COO and Int'l Chair & CEO James Murdoch. But Delta Topco shareholders are “all bound by an agreement that was signed in November 2006 when CVC refinanced” the $2.9B debt that it used to buy F1. That agreement “gives CVC a veto over the sale of any of the other shareholders' stakes in Delta Topco and it states that CVC has first refusal if they decide to sell” (GUARDIAN, 5/9). F1 Management Chair Bernie Ecclestone yesterday said he is "100 percent" certain that CVC does not want to sell F1 to News Corp. Ecclestone: "They are the major shareholders and they do not want to sell. That is 100 percent for sure" (AP, 5/8). Ecclestone noted that “other groups have made approaches about buying the series." Still, he insisted that CVC “doesn’t want to sell unless there is a ‘bloody enormous’ offer.” He also confirmed that the FIA "has the right to veto a buyout" (BLOOMBERG NEWS, 5/6).

LOOKING FOR SUPPORT: The FINANCIAL TIMES’ Blitz, Edgecliffe-Johnson & Allen reported News Corp. is “appealing to a broad church of F1 parties to get behind its approach” to buy the series. News Corp.’s partner in the bid, Exor, also “controls the Ferrari F1 team.” But there is “no shortage of other teams who feel hard done by in negotiations with CVC and Mr Ecclestone over the share-out of F1 profits, and want a say in F1’s future.” Some F1 teams believe that the likelihood of them getting a larger share of profits “may tempt CVC to strike a deal sooner than expected.” But “to get inside the News Corp tent, they must get to grips with the reasoning behind the media group’s interest” (FINANCIAL TIMES, 5/7).
Return to top
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug