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Liberty raising $1.55bn with third-party investors for F1 purchase

NEWS STORY
14/12/2016

Liberty Media has revealed that it has reached an agreement with a number of third-party investors as it seeks to complete its buy-out of Formula One.

Coatue Management, L.L.C., the D. E. Shaw group, JANA Partners LLC, Ruane, Cunniff & Goldfarb Inc., Soroban Capital Partners LP, SPO Advisory Corp., and Viking Global Investors LP have all agreed to help fund the acquisition through a subscription of Liberty's common stock, which is valued at around $25 per share.

"We are excited that this impressive list of investors will participate in the acquisition of Formula 1," said Greg Maffei, President and Chief Executive Officer of Liberty Media. "This group shares our enthusiasm for the sport and our belief in the opportunity to develop and grow it for the benefit of the fans, teams, sponsors and our shareholders. We look forward to closing the transaction in early 2017."

"This is a significant step in Liberty Media's transformative acquisition of Formula 1," added Chase Carey, Chairman of Formula 1, "and is further confirmation that the future of the sport is bright."

The proceeds from the $1.55bn investment will be used to increase the cash portion of the aggregate consideration payable to the consortium of selling Formula 1 shareholders led by CVC Capital Partners.

As a result of this investment, the number of Liberty Media shares issuable to the selling shareholders at the closing of the acquisition will be reduced from approximately 138 million to approximately 76 million. The total number of shares to be issued by Liberty Media in connection with the acquisition of F1, to both the selling shareholders and third party investors, remains unchanged at approximately 138 million shares.

The stake in Formula 1 already acquired by Liberty Media, and the remaining interest to be acquired upon the closing of the acquisition, is being attributed to the Liberty Media Group tracking stock and upon completion of the acquisition, subject to stockholder approval, the Liberty Media Group will be renamed the Formula One Group.

Following completion of the acquisition and the issuance of shares to the third party investors, the third party investors will own approximately 26% of the Formula One Group's equity, and the selling shareholders approximately 39% and will have board representation at Formula 1 to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors.

The completion of the acquisition is subject to certain conditions, including the receipt of certain clearances and approvals by antitrust and competition law authorities in various countries, certain third-party consents and approvals, including that of the FIA and the approval by Liberty Media's own stockholders of the issuance of shares in connection with the acquisition (including the issuance to the Third Party Investors) at the special meeting scheduled for January 17.

At the special meeting, Liberty Media's stockholders will also be asked to approve the name change of the Liberty Media Group to the Formula One Group. However, the approval of the name change proposal is not a condition to closing the Formula 1 acquisition.

The acquisition is expected to close before the end of the first quarter in 2017.

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