CVC exploring Formula One exit

According to the Guardian, CVC has decided to exit as a result of the ongoing court case surrounding bribery allegations brought against chief executive Bernie Ecclestone. It also cites an investigation by BBC's Panorama programme into Ecclestone's tax affairs, adding that the chief executive will soon be replaced at the helm.

CVC had been exploring IPO plans for F1, though these plans have been put on hold twice over the past few years.

Initially, the GP postponed the flotation on the Singapore Stock Exchange in June 2012 due to market volatility linked to lower than expected growth figures in China and India. Then, in November last year, CVC co-founder Donald Mackenzie told the Financial Times the process had been delayed again as the result of the high court's ongoing legal battle with Ecclestone.

The court case is investigating allegations put forward by Constantin Medien that F1 was knowingly undersold in 2006, when CVC purchased the asset for $1.7bn from BayernLB.

In June 2012, former BayernLB banker Gerhard Gribkowsky was sentenced to eight years and six months in prison following his trial for corruption, breach of trust and tax evasion, having admitted taking bribes amounting to $44m from F1 chief executive Ecclestone during the sale of the company to CVC.

CVC acquired a controlling stake in F1 for an undisclosed sum said to be in the region of $1.7bn in 2006. As well as CVC and Ecclestone, shareholders in the Alpha Prema newco included Bambino Holdings and the F1 management team.

In May 2012, CVC sold a $1.6bn stake to BlackRock, Waddell & Reed and Norges Bank Investment Management, reducing its stake from 63.4% to around 40%. The partial exit was believed to value F1 at $9.1bn, including debt.

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• Topics
• Exits
• UK / Ireland
• CVC Capital Partners
• United Kingdom