Liberty Media (LMCA) Close to Reaching Deal for 10-15 Percent of Formula One

Liberty Media Corp. (LMCA) moved closer to a deal for a 10 to 15 percent stake in Formula One over the weekend. The company is in advanced talks with private equity firm CVC Partners to acquire the stake in the company and is expected to reach an agreement as soon as later this week. Liberty Media stock closed at $21.88 per share, up +0.54 or +2.53 percent in Friday’s regular trading session.

Stock Analysis

Douglas County, Colorado based Liberty Media Corp. was founded in 1991 as a spin off from Tele-Communications Inc. and is controlled by Chairman John C.
Malone, owner of a majority of the company’s voting stock. The company is a mass media communications company with interests in a wide range of entertainment and communications businesses.

Liberty Media Corp. is divided into three tracking stock groups: the Liberty Braves Group, which indirectly owns the Atlanta Braves Major League Baseball club, stadium and other associated projects; Liberty Media Group, which represents the company’s interests in Live Nation Entertainment and other minority investments including Time Warner Inc. (TWX), Viacom Inc. (VIAB), and the Liberty SiriusXM Group (SIRI), which manages the company’s controlling interest in Sirius XM Holdings Inc.

According to sources familiar with the matter, Liberty Media is in advanced talks with CVC Partners, a private equity company that controls Formula One’s parent company, Delta Topco.
Liberty Media (LMCA) Close to Reaching Deal for 10-15 Percent of Formula One
Image by pashminu / Pixabay
The discussions are over CVC Partners selling a significant stake in Formula One to Liberty Media Corp. The deal could be announced within the next two weeks, or as soon as later this week according to the sources. The people briefed on the talks said that Liberty plans on taking the 10 to 15 percent stake in Formula One’s parent company for an initial investment of $1.3B to $1.6B, with an agreement for Liberty to take full control of the company in the future.

Formula One, in the hands of Chief Executive Bernie Ecclestone has gone from a sport with moderate interest into the world’s most watched annual sports series, with 400 million viewers of the series last year. Ecclestone has been at the helm of Formula One for the last 40 years. Ecclestone owns a 5.2 percent stake in Delta Topco, with an 8.4 percent ownership stake in Bambino Trust, his family’s trust fund.

According to an article last month in the UK Telegraph, Delta Topco revenue reached $1.7 billion last year with the bulk of the proceeds from three main streams, fees from broadcasters, fees from race hosts and proceeds from advertising and sponsorship payments. Formula One has been one of CVC’s most successful investments so far. Its 35 percent stake has increased seven fold since the company invested $965.6 million in 2006 when Formula One was valued at $2 billion.

Formula One has been the subject of speculation for months, with interest from a number of suitors including talent agency WME-IMG and private equity group Silver Lake. The deal for 10 to 15 percent of Formula One could value the company at more than $8.5 billion if it goes through.

Other News About LMCA

Liberty Media companies shuffle executives

Three of the company’s senior officers changed their positions at Liberty Media at the end of August.


Company is restructuring its business, offering senior debentures for Time Warner Inc. stock.

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Published on Sep 6, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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