F1 sale to CVC in danger of collapse

UPDATE This rumor is downgraded to 'speculation' and will probably soon go to 'false.' JP Morgan has sold its 14.175% shareholding in the Formula One group to Alpha Prema UK Ltd, the company controlled by CVC Capital Partners. This means that Alpha Prema, which previously owned 71.65% of the shares, now has 86% of the company and 100% of the voting shares. It means that the only company other than Alpha Prema now involved is the US investment bank Lehman Brothers which has a shareholding of 14.175%. Look for them to see to Alpha as well. 12/03/05 The future of CVC Capital Partners’ $2bn (£1.15bn, E1.70bn) bid for a majority stake in Bernie Ecclestone’s Formula One business was in danger of collapsing this weekend. JP Morgan and Lehman Brothers, who both own a minority stake in the motor racing series, have a pre-emption right over the 50% stake that CVC Capital Partners wants to buy from Germany’s Bayerische Landesbank (BLB).

This legally binds Bayerische Landesbank to offering the 50% stake in Formula One to the two American Banks in the event of any sale – and industry sources say that both American banks are insisting this weekend that the clause is honored.

CVC thinks the transaction is a done deal, but the American banks privately believe the agreement is worthless. The first the American banks learned about the deal was in a letter. They were furious they had been kept in the dark and denied their legal rights.

The Americans will decide in the next few days what they want to do. Perhaps F1 will be 50% owned by Americans when it is all over.

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