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Formula 1 Teams Snubbing Liberty Media's $1.1B Share Offer

Formula 1 racing teams have "shunned" a $1.1B share offer as part of a $4.4B takeover of the sport by U.S. media company Liberty Media, according to Sylte & Reid for the London DAILY MAIL. The 11 teams -- which include top racing names such as Red Bull, Ferrari and McLaren -- will "now buy at most one third of the shares originally offered by Liberty Media." The deadline for the deal expired on Thursday, but Liberty "has not confirmed it has received any commitments from the teams to take up the share offer." At the same time "it has cut the maximum that could be bought" to just $404M. The teams -- which were offered the shares at $21.26 each -- "may have been put off by the fall in Liberty’s share price which has plummeted since the autumn" and now stands at $18.85 per share. In addition, F1 is "highly leveraged" with $4.1B of debt and underlying profits of $464M. Red Bull CEO Dietrich Mateschitz said, "I honestly don't know if I should buy shares." F1 Chair Chase Carey said, "Several of the teams have expressed interest in investing and we have already begun productive discussions to make the sport more competitive and even more exciting" (DAILY MAIL, 1/21).

PRIZE MONEY SHAKEUP: MOTORSPORT's Jonathan Noble reported Liberty Media "dropped a hint that the sport's prize money structure could change" -- and that Ferrari may "lose the financial privileges it has previously enjoyed." One idea being considered is for there to be "a much fairer distribution" of F1’s commercial revenues, which "could mean the end of historic payments that have gone to older teams." Ferrari, for example, receives more than $90M just for being a part of F1 -- "a figure that is more than double that outfits like Manor and Sauber get" (MOTORSPORT, 1/21).

MANOR'S FUTURE: The BBC's Andrew Benson reported staff at Manor have been told administrators "have made progress in talks with possible investors that could lead to the team's survival." The F1 team went into administration on Jan. 6 and "will collapse if a buyer is not found." Administrators FRP Advisory said that they had "the start of the season firmly in mind" as they seek to secure funding. Manor needs more than £500,000 ($619,000) to "be able take part in pre-season testing and prepare for the first race." Insiders said that the "hope is that money can be sourced before a deadline at the end of next week" (BBC, 1/20).

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