Tuesday, 9 May 2017

F1 power-broker Liberty Media plots fresh shareholder shake-up

The new power-broker in Formula One (F1‎) motor racing is plotting fresh changes to the sport's investor base in a move that will further distance its ownership from the era of Bernie Ecclestone.
Sky News has learnt that Liberty Media Corporation, which struck an $8bn deal to gain control of F1 last autumn, is in talks to co-ordinate a deal that would involve previous shareholders reducing their stakes in its parent company.

Talks about the offering of Liberty Formula One common stock to institutional investors are at an early stage, sources said on Monday, and there is no certainty that it will proceed.

One insider said it could involve a stake in F1's parent worth in the region of $750m.

If it does go ahead, it would be a further stage in the post-Ecclestone era of F1, during which the sport's new chairman, Chase Carey, has been seeking to pave the way for an overhaul of its presentation to audiences around the world.

Mr Carey has recruited a former ESPN executive, Sean Bratches, to oversee F1's commercial activities, while Ross Brawn, the former Ferrari team boss, is now in charge of sporting operations.

Liberty is determined to build F1's following among the younger consumers who are lucrative to advertisers, but has acknowledged that revamping a sport which had made little use of new technology platforms to engage fans will take time.

Mr Carey recently rejected criticism from Mr Ecclestone - who continues to hold an honorary role in F1 - by telling reporters that he wanted to create long-term value rather than short-term profit.

"If you look at sports that have had incredible growth, like the English Premier League or the NFL, they have made investments to grow their franchise," the sport's new chairman told the Financial Times last month.
The 2017 F1 season has started with a resurgent Ferrari winning two of the first four races.

CVC‎ Capital Partners, the controlling shareholder in Delta Topco, F1's former parent, remains an investor in the sport through the Liberty Media Group stock traded on New York's Nasdaq exchange.

An announcement in January to mark the completion of the F1 takeover said that its previous shareholders would own roughly one-third of the outstanding Liberty Media stock, while a group of hedge funds subscribed for $1.55bn of newly issued shares.

The proposed offering is being co-ordinated by Goldman Sachs, JP Morgan and Morgan Stanley, according to banking sources.

One insider said it would probably be executed as a block trade with institutional investors.

The identity of the Delta Topco shareholders who are likely to participate was unclear on Monday, although it is expected to be attractive because of the rise in the Liberty Media share price since the F1 takeover was agreed last year.

At the end of CVC's decade of ownership, stakes in F1's parent were‎ held by the estate of Lehman Brothers, the Wall Street bank whose collapse in 2008 was a landmark moment in the global financial crisis; a major Texan public sector pension fund; and Blackrock, the asset manager which now employs the former Chancellor, George Osborne.

SKY             News.

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