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Ferrari first to take Liberty's share offer

NEWS STORY
12/03/2017

Ferrari has become the first team to take Liberty Media up on its offer of shares.

The sport's new owner is keen to see the participants - the teams - become stakeholders initially offering $1.1bn in shares in the parent company.

When nobody appeared interest, and in the wake of the completion of the deal which saw Liberty take control of F1, the offer was scaled back and $400m in shares was put on offer, with the American company setting a July deadline.

Again, there was little interest, or so it seemed.

Ferrari's annual report reveals that the Italian outfit has sold its 0.25% stake in F1 in exchange for $3.1m in Liberty shares and $11.4m cash.

"As a consequence of the change of control, Ferrari exercised the options… and on 22 February 2017 received approximately $11.4 million in cash (including $2.7 million of previously undistributed dividends), 145 thousand Liberty Media Corporation shares and $911 thousand of Liberty Media exchangeable notes," stated the report.

Since Liberty's shares were priced at $21.26 when offered to Delta Topco's shareholders, this gives Ferrari $3.1m worth of equity, which when combined with the $8.7m received in cash, puts an $11.8m value on the Italian company's options.

The shares are being offered to the team "as part of an induced change in how we operate together," said chief executive, Greg Maffei, Liberty seeking to do away with a current system which sees the top teams not only take the biggest slice of the sport's prize money but also wield enormous influence in various aspects of the sport not least their refusal to agree to a curb on spending.

If other teams do not follow Ferrari's example and buy shares they will be repurchased by Liberty, though Maffei insists that he is "far more interested in getting the right deal with the teams and setting the structure of the races. Much more cost-containment and much more fairness in prize money."

This is not the first time Ferrari has broken ranks, indeed, the Italian company was offered the Delta Topco stock when it committed to continue in F1 from 2013 to the end of 2020.

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1. Posted by Hardliner, 14/03/2017 17:51

"That's a lot of claims in one short posting, Nonickname...but are any of them really true or likely? I don't want to examine each one, but how about we start with 'Liberty means a level playing field in terms of speed'. Would you like to call McLaren in the morning and pass that good news on?"

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2. Posted by nonickname, 13/03/2017 14:25

"I think it great that Ferrari are in .It gives the other teams no option but to get in or get out. Liberty means a level playing field in terms of speed and performance(and Brawn is involved here). This is to open F1 for betting which is the aim of Liberty.No one except Todd would bet on a field that has only 2 competing teams. The rules will change and the racing will get better.Prize money and qualifying will be first and then the other areas will be sorted. Will the purists like it? Some will, some won't. "

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3. Posted by Hardliner, 13/03/2017 14:12

"I've nailed my colours to the mast already, I think Bernie sold Liberty a dead horse. Disappointing, then, to see Ferrari accept Liberty shares, which is similar to what happened when FOTA1 broke up. It's only $3m worth out of the $1bn that Liberty wanted the teams to buy, but is it a chink in the armour of the nascent FOTA2? Or have Ferrari been given a sweetheart deal [e.g. secret underwriting of the share price] to try and coax the other teams aboard the Liberty ship? That's the way the world works..."

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