F1: BOUGHT OUT BUT STILL BOSS
[BIZ/LEI: London, November 25] Recent financial problems, including the bankruptcy of the promoter Didier Fourny, mean that the Walloon government has to take over. The event cannot be canceled before 2010 because of a penalty clause in the contract with Mr Ecclestone, which requires a EUR 15m compensation payment to Ecclestone for every race missed. This clause may be extended to apply through 2015, with all disputes being subject to British jurisdiction. CVC Capital Partners, Bayerische Landesbank and Bambino Holdings have announced that a new company, Alpha Prema has reached agreement to acquire Bayerische Landesbank’s and the S. Ecclestone trust's ("Bambino") interests in Formula One Group. Closing is conditional on EC merger clearance and FIA consent. The shareholders of Alpha Prema will be CVC Capital Partners ("CVC"), Bambino (through a reinvestment), Mr Bernie Ecclestone and the Formula One management team. CVC will have a majority stake in Alpha Prema and a controlling interest in the Formula One Group. Bernie Ecclestone will remain as Chief Executive of the Formula One Group and Dr Gerhard Gribkowsky (currently Chairman of SLEC Holdings), Donald Mackenzie (CVC) and a Bambino representative, will join the Board of Alpha Prema. A parallel development is that a group including BMW, Mercedes, Renault, Honda and Toyota are insisting that Mr Ecclestone reform the F1 scene. Otherwise, they will sign an agreement before the end of the year with TV stations and racing circuits for the 2008 season. They also want to see the end of the 75-year-old Mr Ecclestone’s reign, although they seem to have misread the position of Ecclestone vis-à-vis SLEC. CVC has experience of investing in motorsport and rights management, through its ownership of Dorna, the company that organizes and manages the commercial rights of the FIM Road Racing World Championship Grand Prix (MotoGP), which was acquired by CVC in 1998. The company is also a controlling shareholder of the Automobile Association in the UK. Mr Ecclestone commented: We are delighted to have CVC as a shareholder whose long-term strategies and vision will provide the stability for teams, promoters and Mr Mackenzie commented: CVC is committed to a flourishing and successful FIA Formula One World Championship, and will support every effort being made to maintain Formula One at the pinnacle of world motor sports. CVC has given its full support to the current discussions between Formula One, the teams and manufacturers to enable a successful extension of the current Concorde Agreement. Dr Gerhard Gribkowsky commented: Bayerische Landesbank is pleased to sell its stake to a reputable investor with a long term view and considerable knowledge and experience in motorsport. With CVC as shareholder and with the continued commitment of Mr Ecclestone and Bambino, Formula One will have the resources to further develop the business and the sport to its full potential.
CVC has acquired a controlling interest in the Formula One Group, a matter of vital interest to the Spa-Francorchamps circuit and the Walloon Government. Two years ago, the Belgian Government was persuaded to alter its Tobacco Advertising Act, to ensure that F1 Boss Bernie Ecclestone would continue with the F1 event at Francorchamps.
manufacturers. They are knowledgeable about motor sport and make an ideal partner for Formula One.
(Additional source: FTD)
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