Bernie Ecclestone Three More Years As Boss of F1 and The Reverse Takeover of Liberty Media by F1

“Because all this is going through, they (CVC) want me to be there to help them with all sorts of things. I can’t afford to be away for five to six days” – Bernie Ecclestone

Things are moving along the path that Liberty Media will take control of F1 from private equity group CVC Capital Partners.  Yet anything can happen.  One thing is clear.  Bernie Ecclestone say’s “They want me to be here for three years,” that is one loaded answer could mean anything and the three years better be to Bernie’s liking.

Here is what I can tell you.  Chase Carey, vice-chairman of 21st Century Fox, will become the new chairman.  This is a great thing.  One day when David Bowie’s office called and said ” Hey Tim Rolling Stones need a broadcasting deal”, I took this to Carey who made it happen for the ‘Bridge to Babylon Tour’.  Carey is also a very smart nice guy.

The Deal –

Liberty has already taken an initial 18.7 per cent stake in F1 for $US746 million, paid for in cash to the existing owners of Delta Topco — the holding company of Formula One.

Those owners are:

  • CVC (38.1 per cent) — A private equity firm that invests its clients’ money by buying out businesses and attempting to raise their performance, generally before selling them or listing them on the share market
  • Waddell & Reed (20.5 per cent) — A US-based asset management firm
  • LBI (12.1 per cent)
  • Bambino Holdings (8.4 per cent) — The Ecclestone family trust
  • Norges (4.1 per cent) — The Norwegian sovereign wealth fund
  • Bernie Ecclestone (3.3 per cent) — The man who’s effectively controlled F1 for almost 40 years
  • Management (2.8 per cent)
  • Other (10.6 per cent)

However, once the second stage of the deal goes through Liberty Media will not only own Formula One, but will actually become Formula One — changing its name to Formula One Group (with the share market ticker FWON).

And it isn’t like the existing owners of F1 will just disappear with some cash.

The second part of the deal involves another $US350 million or so worth of cash, but most of the payment to F1’s existing owners will be in newly issued Liberty Media shares.

In fact, F1’s existing owners will have a near 65 per cent economic stake in the new Formula One Group (what is currently Liberty Media), although their shares are non-voting, so the current Liberty shareholders will have control of the business.

 

The first stage of the deal has already been done, with Liberty now already holding its 18.7 per cent stake, while the final stage is expected to complete in the first few months of 2017.

Although the final stage of the deal is subject to approval from competition regulators, approval by Liberty shareholders (which include Warren Buffett’s Berkshire Hathaway) and the go-ahead from motorsport’s top governing body, the Federation Internationale de l’Automobile (FIA).


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