A n September 7th, Liberty Media did it the first step on the way to take over Formula 1. The US group bought an 18.7 percent stake in Formula 1 holding Delta Topco for $ 746 million. These were the shares of the F1 majority owner CVC Capitals.
F1 takeover completed at the beginning of 2017
Up until then, the financial company held 35.3 percent of Formula 1. In one second step Liberty Media wants to buy the remaining stake from CVC. And also a certain percentage of the other 15 shareholders. This would give the Americans 100 percent of the voting rights and steer Formula 1 in commercial matters.
The takeover should be completed in the first quarter of 2017. For this, Liberty Media needs fresh money, which they have now raised. As the group announced on Wednesday (December 14, 2016), an agreement was concluded with various companies that will bring in a total of $ 1.55 billion. Liberty Media is selling this value common stock for $ 25 each to the following companies: Coatue Management, LLC, the DE Shaw Group, Jana Partners LLC, Ruane, Cunniff & Goldfarb Inc., Soroban Capital Partners LP, SPO Advisory Corporation and Viking Global Investors LP. The shares are to be issued at the same time as the takeover of Formula 1.
“This is an important step for Liberty Media in its process of taking over Formula 1. It is also further confirmation that the future of the sport is looking bright, ”commented Chase Carey, Formula 1’s new strong man, who will stand as President over CEO Bernie Ecclestone.
With the fresh capital, Liberty Media CVC buys the remaining shares in the premier class. Originally, CVC was to receive 138 million shares of Liberty Media valued at $ 2.9 billion. But the new plan provides that Liberty Media will only hand over 76 million shares to CVC. Which reduces the value accordingly. 62 million are to go to the new investors.
EU and FIA still have to approve
The takeover of Formula 1 has yet to be approved by various authorities. For example from the EU Commission, which is examining the sale for a possible cartel. Or from the FIA. The world association has to check whether the takeover of Formula 1 could harm. The shareholders ofLiberty Media have yet to agree. This is to be voted on on January 17th. If all instances approve the deal, the Liberty Media Group would be renamed Formula One Group. The shares in Formula One Group would be distributed as follows: The new investors would hold around 26 percent of the share capital. The salespeople around CVC about 39 percent. The rest, 35 percent, would be in the hands of Liberty Media, which controls the voting rights.