Sunday February 20th, 2000

Motor racing boss Bernie Ecclestone has agreed to sell 37.5 percent of his Formula One business to U.S. private equity firm Hellman & Friedman for 625 million pounds ($1 billion), the Sunday Times reports today.

The newspaper said Ecclestone had clinched the deal after Deutsche Bank's Morgan Grenfell Private Equity announced it would not take up an option to buy the stake itself.

Morgan Grenfell agreed last October to buy 12.5 percent of the Formula One holding company - which owns the broadcasting rights to Grand Prix races - but failed to bring in other investors to take a further 37.5 percent as originally planned.

The sale to San Francisco-based Hellman & Friedman values the Formula One Administration at 1.7 billion pounds and leaves the Ecclestone family trust with 50 percent of the equity.

Hellman & Friedman will appoint two directors to the Formula One holding's board and intends to remain a big investor once Ecclestone floats the business.

Ecclestone has been working on floating Formula One but his plans were put on hold after the European Commission launched an inquiry into the way the sport is run and its television deals.