Media giant News Corp. and Italian investment firm Exor said Tuesday that they were working together to search for other investors to potentially fund a bid for the motor racing series, which has been owned by private equity firm CVC Capital Partners since 2006.
Exor, controlled by the Agnelli family who run the car giant Fiat which in turn owns Ferrari, has confirmed it is exploring the prospect of putting together a takeover bid with News Corporation.
In a joint statement, News Corp. and Exor said said they are discussing the “possibility of creating a consortium with a view to formulating a long-term plan for the development of Formula One in the interests of the participants and the fans.”
“Over the coming weeks and months, Exor and News Corporation will approach potential minority partners and key stakeholders in the sport. There can be no certainty that this will lead to an approach to Formula One’s current owners.”
Formula One’s commercial rights are held by the venture capital firm CVC, which bought them in 2006 for £1.8bn. Its chief executive, Bernie Ecclestone, stated last month that rumours of a takeover by News Corp were “rubbish,” and any offer would have to be “ridiculous”.
However, given the combined worth of Exor, which has a net asset value of £8bn, and News Corp, such a bid should not be a problem.
Ecclestone said: “You would think if somebody wanted to buy it they would approach the people who own it to see if they want to sell it. Personally, I know CVC don’t want to sell, so it’s going to be a bit difficult. I can see CVC in for the long haul, absolutely, 100%.”
However, reiterating the “ridiculous” offer line, Ecclestone added: “If somebody came along and offered them a lot more money than it’s worth, they would obviously say: ‘Sit down, let’s have a chat.’ But I get the distinct feeling that’s not going to happen. I can’t understand why a company as big as News Corp need to keep looking for partners. First it was Carlos Slim, and now we’ve a new one.”
If any bid is made, a potential sticking point is the Concorde agreement, the arrangement that binds together the teams, the governing body – the FIA – and CVC. A clause in the agreement stipulates transmission of races must be via free-to-air broadcasters, rather than subscription services such as Murdoch’s Sky network.
CVC confirmed a “friendly” approach had been made by the Exor News Corporation consortium. “James Murdoch has informed us that the approach is friendly, and that they acknowledge that Formula One is privately owned by CVC and not currently for sale,” the statement said. “Any investment in Formula One will require CVC’s agreement and will need to demonstrate that it is in the interest of the sport and its stakeholders, taken as a whole.”
