British investment group takes stake in F1

Frankfurt:

British investment group CVC Capital Partners Ltd. said it had bought a majority stake in the Formula One Group, giving it control of the racing series. CVC said on Friday it planned to keep Bernie Ecclestone, the longtime commercial head of Formula One, as chief executive. The London-based buyout group said it formed a new entity, Alpha Prema, which will acquire the stakes in Formula One held by Munich-based Bayerische Landesbank and the Ecclestone family trust company, or Bambino Holdings. Ecclestone's family trust holds a 25-percent stake in SLEC Holdings, which owns the myriad of companies that run Formula One. The remaining 75 per cent in SLEC is held by Bayerische Landesbank - which has 48 per cent - along with JP Morgan and Lehman Brothers. The deal will give Alpha Prema 73 per cent of Formula One and majority control. The acquisition is not expected to change the way Formula One operates on the track. The price of the deal, which is subject to regulatory approval, was not disclosed, and a spokeswoman for CVC, Deborah Fairbrass, said it would likely be wrapped up in 2006. Under the terms of the deal, Alpha Prema will have as its shareholders CVC, Bambino, Ecclestone and the Formula One management team. Gerhard Gribkowsky, the chairman of SLEC and Donald McKenzie of CVC will also be part of Alpha Prema's board, along with a representative of Bambino. Ecclestone, 75, has been with F1 for 26 years, amassing a fortune estimated at USD 3.7 billion. "We are delighted to have CVC as a shareholder whose long-term strategies and vision will provide the stability for teams, promoters and manufacturers," he said in a statement. "They are knowledgeable about motor sport and make an ideal partner for Formula One." CVC owns some 38 companies in Europe and operates 12 offices, including the Madrid, Spain-based marketing company Dorna Sports SA, which stages the annual MotoGP motorcycle world championship. CVC is also the majority shareholder of the Automobile Association in Britain. "CVC has given its full support to the current discussions between Formula One, the teams and manufacturers to enable a successful extension of the Concorde Agreement," McKenie said. The move was partly aimed at blunting rival of Ecclestone, known as the Grand Prix Manufacturers Association, which is threatening to start a rival series a€" or take over Formula One a€" beginning in 2008. GPMA is made up of the five major manufacturers in Formula One a€" BMW, Daimler Chrysler, Renault, Toyota and Honda a€" and wants control of the sport. The GPMA and most of the teams - with the exception of Ferrari a€" have called for more financial transparency in the sport and want the power of the world governing body a€" the FIA a€" limited. The breakaway group wants appeals taken to the independent, Swiss-based Court of Arbitration for Sport, rather than the FIA's own court. It also asked that special veto rules - granted only to Ferrari - be rescinded. The president of the FIA is Max Mosley, a longtime friend of Ecclestone and his former lawyer. (AP)