Majority F1 Stocks Sold - ZR-1 Net Registry Forums

gaijin · 12-03-2005

25 November 2005

Bernie Ecclestone and a German bank confirmed early on Friday afternoon that the majority of F1 has been sold to 'CVC Capital Partners'. A joint statement said Ecclestone, 75, would retain a small stake and stay as CEO of the F1 company.

gaijin · 12-03-2005

CVC Capital to Buy
Majority Stake
In Formula One
By MIKE ESTERL
Staff Reporter of THE WALL STREET JOURNAL
November 26, 2005; Page A3

CVC Capital Partners agreed to acquire a majority stake in Formula One Group after Germany's Bayerische Landesbank agreed to sell its large holding, ending a lengthy battle for control of the celebrated motor-racing organization.

The private-equity group said Bernie Ecclestone, the 75-year-old billionaire and longtime head of Formula One, will stay on as chief executive and keep a minority equity stake. Mr. Ecclestone has clashed repeatedly with the German bank, known as BayernLB, in recent years as he tried to maintain his grip on the board of Formula One despite holding only a 25% equity stake.

CVC declined to disclose the price tag for the acquisition, although people in the industry have estimated that Formula One is valued at between $2 billion and $4 billion. BayernLB had roughly a 50% stake in the holding company that controls Formula One. The bank has long said it didn't view Formula One as a strategic holding, and an official said Friday that BayernLB is "pleased to sell its stake to a reputable investor."

But big challenges lie ahead for CVC and Mr. Ecclestone, a former used-car salesman who built Formula One into a powerful marketing force in the late 1970s. Five European and Japanese auto makers, unhappy with the way Formula One is being run, are mulling the formation of a rival racing circuit starting in 2008. In addition to boardroom strife and complaints from car makers about a lack of transparency, earnings from sponsorships have leveled off lately amid declining television audiences in some markets.

CVC confirmed it is also in talks to buy the combined 25% stake that Lehman Brothers Holdings Inc. and J.P. Morgan Chase & Co. have in Formula One. Lehman and J.P. Morgan declined to comment on the latest developments.

BayernLB, Lehman and J.P. Morgan secured a combined 75% equity stake in 2002 following the bankruptcy of German media company Kirch Group, the banks' debtor and a Formula One shareholder. The U.K. High Court ruled late last year that the banks should be allowed to appoint additional directors to the board despite protests from Mr. Ecclestone.

In a statement Friday, Mr. Ecclestone said CVC was "an ideal partner" for Formula One, predicting that the London-based investment group's "long-term strategies and vision will provide the stability for teams, promoters and manufacturers."

A spokesman at German auto manufacturer BMW AG declined to comment on how the changes at Formula One would affect its strategy in motor sport. A BMW board member reiterated a threat earlier this week that car makers may form their own racing league under the auspices of the Grand Prix Manufacturers Association.

CVC will have a controlling interest in Formula One through the creation of a company, Alpha Prema, in which it will have a majority stake. It noted that it isn't new to motor sport, as it already owns Dorna, which manages the commercial rights of motorcycle racing's FIM Road Racing World Championship Grand Prix.

Write to Mike Esterl at mike.esterl@dowjones.com

12-03-2005	#1
gaijin Join Date: Jun 2004 Location: Road Atlanta Posts: 371	Majority F1 Stocks Sold 25 November 2005 Bernie Ecclestone and a German bank confirmed early on Friday afternoon that the majority of F1 has been sold to 'CVC Capital Partners'. A joint statement said Ecclestone, 75, would retain a small stake and stay as CEO of the F1 company.

12-03-2005	#2
gaijin Join Date: Jun 2004 Location: Road Atlanta Posts: 371	Re: Majority F1 Stocks Sold CVC Capital to Buy Majority Stake In Formula One By MIKE ESTERL Staff Reporter of THE WALL STREET JOURNAL November 26, 2005; Page A3 CVC Capital Partners agreed to acquire a majority stake in Formula One Group after Germany's Bayerische Landesbank agreed to sell its large holding, ending a lengthy battle for control of the celebrated motor-racing organization. The private-equity group said Bernie Ecclestone, the 75-year-old billionaire and longtime head of Formula One, will stay on as chief executive and keep a minority equity stake. Mr. Ecclestone has clashed repeatedly with the German bank, known as BayernLB, in recent years as he tried to maintain his grip on the board of Formula One despite holding only a 25% equity stake. CVC declined to disclose the price tag for the acquisition, although people in the industry have estimated that Formula One is valued at between $2 billion and $4 billion. BayernLB had roughly a 50% stake in the holding company that controls Formula One. The bank has long said it didn't view Formula One as a strategic holding, and an official said Friday that BayernLB is "pleased to sell its stake to a reputable investor." But big challenges lie ahead for CVC and Mr. Ecclestone, a former used-car salesman who built Formula One into a powerful marketing force in the late 1970s. Five European and Japanese auto makers, unhappy with the way Formula One is being run, are mulling the formation of a rival racing circuit starting in 2008. In addition to boardroom strife and complaints from car makers about a lack of transparency, earnings from sponsorships have leveled off lately amid declining television audiences in some markets. CVC confirmed it is also in talks to buy the combined 25% stake that Lehman Brothers Holdings Inc. and J.P. Morgan Chase & Co. have in Formula One. Lehman and J.P. Morgan declined to comment on the latest developments. BayernLB, Lehman and J.P. Morgan secured a combined 75% equity stake in 2002 following the bankruptcy of German media company Kirch Group, the banks' debtor and a Formula One shareholder. The U.K. High Court ruled late last year that the banks should be allowed to appoint additional directors to the board despite protests from Mr. Ecclestone. In a statement Friday, Mr. Ecclestone said CVC was "an ideal partner" for Formula One, predicting that the London-based investment group's "long-term strategies and vision will provide the stability for teams, promoters and manufacturers." A spokesman at German auto manufacturer BMW AG declined to comment on how the changes at Formula One would affect its strategy in motor sport. A BMW board member reiterated a threat earlier this week that car makers may form their own racing league under the auspices of the Grand Prix Manufacturers Association. CVC will have a controlling interest in Formula One through the creation of a company, Alpha Prema, in which it will have a majority stake. It noted that it isn't new to motor sport, as it already owns Dorna, which manages the commercial rights of motorcycle racing's FIM Road Racing World Championship Grand Prix. Write to Mike Esterl at mike.esterl@dowjones.com