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CVC in "no hurry" to sell F1 to teams says Ecclestone

NEWS STORY
13/04/2014

Bernie Ecclestone has poured cold water on the idea that Formula One's teams may be buying into the sport according to a revealing article in the Mail on Sunday by Christian Sylt.

Amongst the revelations, Ecclestone discloses that he once tried to buy luxury department store Harrods but it is his comments about the future of F1 that will make the sport take note.

Last week the Financial Times quoted Ecclestone, who has a 5.3% stake in the sport, saying that he "would like to get back to" a plan drawn up some years ago for him and the teams to become controlling shareholders of F1. "We'd certainly want control," he reportedly said. However, on the same day that the report was printed, Ecclestone was interviewed on Sky Sports by Martin Brundle and said it is "nonsense" that he wants to take over F1.

He reiterated this in an interview with Bloomberg earlier this week but confirmed that a group of F1's 11 teams is in discussion about buying a stake in the sport. Any transaction would require consent from the private equity firm CVC which controls F1 and has the right of first refusal if any of its shareholders want to sell. Ecclestone has now revealed that it isn't likely CVC will sell and this is no surprise.

F1 has been one of CVC's best-performing assets and it has made around £2.4bn in dividends and share sales from its initial £582.6m investment. It holds a 35% stake and planned to exit in 2012 through a flotation on the Singapore stock exchange which stalled due to the eurozone crisis.

"Maybe CVC will still try and float. They are in no hurry to sell. I get the impression they don't want to get rid of F1," says Ecclestone.

Earlier this year it came to light that American media mogul John Malone's Liberty Group had teamed up with Discovery Communications to consider bidding for F1. However, the brakes are on the float as F1 awaits the outcome of a bribery trial against Ecclestone in Munich which will begin later this month.

The trial was sparked by a £26.5m payment made by Ecclestone and his Bambino family trust to Gerhard Gribkowsky, former chief risk officer of German bank BayernLB. In 2006 Gribkowsky was responsible for selling a 46.7% stake in F1 owned by BayernLB. German prosecutors believe that the £26.5m payment to him was a bribe to steer the stake to CVC as it had agreed to keep Ecclestone in F1's driving seat.

Ecclestone denies the charges. When the bribery trial was announced in January he resigned as a director of F1's parent company Delta Topco but he still runs the sport on a day-to-day basis.

In February he won a related case in London's High Court in which he was accused of undervaluing F1 through the alleged bribe because other bidders may have paid more than CVC. The judge, Mr Justice Newey, ruled that Ecclestone did not believe the shares were sold below market value. However, he said that Ecclestone paid a bribe to ensure that the shares were "transferred to someone more congenial to him." He added "I am afraid that I find it impossible to regard him as a reliable or truthful witness."

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READERS COMMENTS

 

1. Posted by GoodPublicity, 14/04/2014 4:31

"Correction: At Bernie's 1986 Australian GP press conference . . ."

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2. Posted by GoodPublicity, 14/04/2014 4:30

"Alejandro Agag grossly exaggerates the degree of difficulty of managing Formula 1. The most important task - arranging the championship schedule - only requires a telephone directory and a pocket calculator. There's no need for honesty, transparency or due process, as the following episode illustrates.

At Bernie's 1985 Australian GP press conference, I challenged him on his inability to finalise the F1 schedule until near the end of the preceding year. He replied, "It isn't easy - would you like to help?" I immediately and loudly replied in the affirmative, with the world's F1 media as witnesses, but Bernie never honoured his offer.

Clearly the man isn't to be trusted."

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