CVC completes Formula One transaction

CVC’s acquisition vehicle Alpha Prema now controls 100% of the motor racing business following the acquisition of a remaining interest from Lehman Brothers.

European private equity investor CVC Capital Partners has acquired Lehman Brothers’ stake in motor racing business Formula One for an undisclosed sum.
Alpha Prema, an acquisition vehicle controlled by CVC, purchased the remaining stake it did not already own from Lehman Brothers just days after the European Commission gave the go-ahead for the deal.
The regulator approved the deal on the proviso that CVC sells off its Spanish subsidiary Dorna, which is the promoter of the Moto GP motorcycle championship, in order to remove concerns regarding the bundling of broadcasting rights. CVC acquired Dorna in 1998 for £45 million (€65 million; $78 million), according to a report in The Times.
According to CVC, Alpha Prema now owns 100 percent of the Formula One Group. The firm added that Lehman Brothers has an option to reinvest in Alpha Prema.
Last November, CVC became the controlling shareholder of Formula One Group after buying equity in the business from German bank Bayerische Landesbank and Bambino Holdings, an investment trust managed by Formula One founder Bernie Ecclestone, who remains as chief executive of the business.
In December, JP Morgan sold its interest in Formula One for an undisclosed sum, taking Alpha Prema’s stake in the business to 86 percent at the time.
Formula One is still in discussions regarding a dispute over revenue sharing with the racing teams and car manufacturers, including BMW, Renault, DaimlerChrysler and Honda, and has not yet withdrawn its threat to set up a rival racing franchise when current contracts expire at the end of 2007.
CVC Capital Partners was not immediately available for comment. The firm’s European arm is currently investing from CVC European Equity Partners IV, which closed on €6 billion ($7.25 billion) in July 2005.