Muppet owner pays
£1.3bn for F1 stake
Rupert Steiner and John Waples
THE German media company that recently
bought the Muppets is thought to be close to
paying £1.3 billion for 50% of Bernie
Ecclestone's Formula One business.
In an extraordinary twist to the Formula One
saga, EMTV is buying the stake from Morgan
Grenfell Private Equity, Deutsche Bank's
venture capital arm, and Hellman &
Friedman, an American private-equity firm,
giving both companies a 100% profit.
Hellman & Friedman, which invested only
last month, will have made almost £500m in
four weeks.
Both companies are expected to announce this
week that they have sold their stakes to
EMTV, one of Europe's fastest growing media
companies. Specialising in family and
children's programming, it is a family
controlled business run by Thomas Haffa. It is
also strong in merchandising, a core earner
for Formula One.
Last month Haffa spent $680m (£435m)
buying The Jim Henson Company, which
owns Kermit, Miss Piggy and the rest of the
Muppets.
The deal gave Haffa a stake in the Odyssey
Channel, an American cable network with
nearly 30m customers, and the Kermit
Channel, aired in Asia. It has also acquired a
library of more than 450 hours of
programming, including Fraggle Rock and
some Sesame Street characters.
EMTV will buy the 37.5% stake owned by
Hellman & Friedman, and Morgan Grenfell's
12.5%, which the bank bought last October
for £234m. The deal values the entire Formula
One business at £2.6 billion and places a £1.3
billion value on the half share owned by Slec,
the Ecclestone family trust.
Ecclestone and his wife Slavica, whose
fortune now totals £2 billion, are ranked the
sixth wealthiest Britons by the Sunday Times
Rich List, published today.
Ecclestone has been trying to realise value
from his motor sports businesses for some
time and began a process to float Formula
One in an issue to be handled by Salomon
Brothers two years ago. But he later
abandoned it.
Some investors were concerned about the
European commission's probe into
Ecclestone's television contracts.
Ecclestone, 69, has since said he has altered a
number of contracts with which the
commission was concerned and does not
expect its inquiry to be a long-term problem.
He expects to be given a clean bill of health
soon and still intends to float the business
eventually.
Last May Robin Saunders at West LB, the
German Bank, bought about 40% of an F1
bond being marketed jointly by Morgan
Stanley with a price tag of $1.4 billion
(£890m). It had been reduced from $2 billion
to $1.4 billion and had its maturity halved to
10 years.
In October Ecclestone did the Morgan deal
and the bank had an option to purchase a
further 37.5%, but Morgan's Scott Lanphere
failed to organise an investor group after
protests at his desire to be lead investor.
Instead, as The Sunday Times revealed, the
stake was bought by the San Francisco-based
Hellman & Friedman group, which has also
bought into Young & Rubicam, the advertising
agency, and John Fairfax, the Australian
media giant. Lanphere missed making a quick
profit. Deutsche executives are said to have
put pressure on him to justify his Formula One
investments and this caused the sale. He has
become increasingly desperate over recent
weeks, making frequent trips to Germany and
"rattling cages" to get the stake sold.
Morgan also owns a stake in the troubled
Arrows Formula One team, which Lanphere
has also been trying in vain to sell.
Ecclestone said of Morgan Grenfell: "They
thought they could play hardball and they
couldn't.
"They missed the deadline on the option and I
wasn't prepared to extend it. They are not as
hard as they think." |
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