EM.TV Takes 50 Percent Stake in Formula One
Wednesday March 22nd, 2000
Germany's EM.TV Merchandising took a 50 percent stake in Formula One on Wednesday, joining Bernie Ecclestone as co-owners in a cash and share deal worth around $1.65 billion.
The Munich-based media production and marketing group said it bought a 50 percent stake in SLEC, the holding company which owns Formula One motor racing activities, via a 100 percent takeover of Speed Investment Ltd.
Speed Investment was a holding company for the interests in Formula One of Morgan Grenfell Private Equity and the U.S.-based private equity investment firm Hellmann and Friedman.
Formula One supremo Ecclestone, who is both a vice-president of world body FIA and chief executive of the company that controls the exclusive commercial and broadcasting rights to the sport, owns the remaining 50 percent through a family trust.
EM.TV said it paid $712.5 million cash for Morgan Grenfell's 12.5 percent stake and Hellman's 37.5 percent. It also sweetened the deal with 10 million EM.TV shares.
EM.TV said it was also in talks with SLEC about taking a further 25 pct stake within one year and also planned to float the holding company in the medium-term.
Ecclestone paved the way for a stock market flotation last year when he raised $1.4 billion in the bond market.
The Briton has been looking for several years to float the business but the plans have been put on hold due to an investigation, still under way, by European Commission competition chiefs.
"In addition to the acquisition of 50 percent of SLEC, EM.TV and SLEC are in discussions about acquiring a further shareholding in Formula One in one year," EM.TV said.
The deal means EM.TV, which is listed on Germany's Neuer Markt index for growth stocks, will now be involved in the marketing of the sport around the world.
"This agreement certainly represents the single most important deal in our company's history," the group said.
Formula One's 16 races in the 1999 season were broadcast in over 200 countries by 120 television channels to more than 4.5 billion viewers, EM.TV said.