F1 Takeover Bid Blow as CVC First Refusal is Revealed

May 9, 2011

It has been revealed that Formula One parent company, private equity firm CVC could block a possible takeover of the sport from the consortium between Rupert Murdoch owned News Corporation and Italian investment firm Exor, as it as first refusal on any stakes offered for sale.

James Murdoch confirmed last week that News Corporation had teamed up with Agnelli family owned Exor, who have ties with Ferrari, for a possible takeover bid of Formula One, buying out the sport’s minority shareholders.

CVC owns 63.4 per cent of Formula One’s parent company Delta Topco, and has confirmed it received a ‘friendly’ approach from Murdoch, the deputy chief operating officer of News Corp. 

Murdoch released a statement confirming: “Over the coming weeks and months, Exor and News Corporation will approach potential minority partners and key stakeholders in the sport.”

However, the shareholders of Delta Topco are all bound by an agreement signed in 2006 when CVC refinanced the £1.75bn (US$2.86bn) debt which it used to buy F1.

The agreement states that CVC has first refusal on any shareholders’ stakes if they decide to sell, and also gives the firm the right to veto the sale of any other stakes in Delta Topco. 

Nick Clarry, CVC’s managing director, added: “The shareholders’ agreement gives us control in any event, as they cannot sell without first offering the shares to us and we must approve all and any transfers.”


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