The Rupert Murdoch-owned News Corporation has officially confirmed its plans to investigate a joint takeover of Formula 1 with an Italian investment firm that has close ties to Ferrari’s parent company, FIAT.
After weeks of speculation and rumour that News Corporation was seeking a tie-in with Mexican billionaire Carlos Slim to purchase the sport’s commercial rights, a statement from the Italian EXOR group has confirmed that it is the interested second party in the negotiations.
The news will undoubtedly come as a blow to those who thought that sch a thing would never happen, but a jointly-issued press release confirmed that both companies were “in the early stages of exploring 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”.
The statement also confirmed that they will approach the sport’s minority shareholders and stakeholders in the coming weeks before considering whether to launch a full-scale purchase attempt.
Furthermore, the announcement will spark plenty of speculation as to the appropriateness of EXOR’s involvement, given that it is (in effect) a parent company of Ferrari.
Meanwhile, a seemingly more nervous Bernie Ecclestone et al are still claiming that Formula 1 is not for sale, while CVC Capital Partners – the primary shareholder in the sport’s commercial rights – is being very cryptic with its own wording.
In a reply press release, it acknowledged the approach from EXOR-News Corporation consortium.
“Murdoch has informed us that the approach is friendly, at a very preliminary stage, and that they acknowledge that Formula 1 is privately owned by CVC and not currently for sale,” the statement reads.
“CVC recognises the quality of EXOR and News Corporation as potential investors, but any investment in Formula 1 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.”
Reading between the lines, and you may note that CVC’s statement says that Murdoch was told that the business is not for sale, not that it is not for sale…
A private equity organisation (like CVC) worth its salt will always entertain the overtures of any interested buyer, as they exist by their very nature to provide profits to their investors.
If the consortium offers the right price, then don’t be surprised if CVC Capital Partners decide to sing a very different tune.
If the offer is too low, then CVC will sit tight until someone else comes along.
[Original image via CBC Sports]