Thursday March 9th, 2000

German industry sources said on Thursday that media group EM.TV was close to completing a deal to obtain a majority stake in Bernie Ecclestone's Formula One Administration Ltd.

Sources close to the negotiations confirmed to Reuters a report in the Sueddeutsche Zeitung newspaper that the Munich-based media group would acquire 50 percent plus one share in FOA.

A spokeswoman for EM.TV declined to comment. "In general we do not comment on rumours," she said.

The sources said the price for the stake would be near $1.8 billion. A large part of the payment will be made with EM.TV shares, the sources said. A smaller portion of the transaction would involve cash.

An agreement could be reached this week, the sources said. After the acquisition FOA would be floated, probably at first on Germany's Neuer Markt bourse.

EM.TV wants to acquire a 12.5 percent stake currently held by Deutsche Bank subsidiary Morgen Grenfell Private Equity plus a 37.5 percent stake held by the U.S. investment group Hellman & Friedmann. Ecclestone would retain the rest.

Ecclestone last month dismissed reports that EM.TV would take a stake in Formula One, which owns the marketing and broadcasting rights to Grand Prix motor races.

"I am not selling to Mr. Haffa," Ecclestone told Focus news magazine in mid-February, referring to EM.TV chief executive Thomas Haffa.

MGPE chief Graham Hutton had told Focus that they had spoken to Haffa about a deal but did not reach an agreement.

EM.TV, a company's whose share prices has multiplied in the last few years, is primarily known for dealing with rights to children's programming. It recently acquired the Jim Henson company and the "Muppets Show" for $680 million.