A change of control is “an event of default under the Senior Facilities
Agreement,” the covenant continues. “[That] entitles the lenders to, among
other things, cancel the Senior Debt Facilities.”
The debt is secured on the shares and assets of almost all the key F1
companies, so defaulting on it could ultimately lead to the sport ending up
in the banks’ hands.
CVC has put measures in place to prevent it from being forced into this
position by its co-shareholders – combining their stakes to form a group
with more than 50.1pc.
F1’s minority shareholders include its management and chief executive, Bernie
Ecclestone, his Bambino family trust and three money managers – BlackRock,
Waddell Reed and Norges, the investment division of Norway’s central bank.
However, if any of them wants to sell, not only does CVC have to give approval
but it also has the right of first refusal.
It is possible that F1’s lenders could agree to waive their change of control
provision, but there is no guarantee they would do this. Likewise, there is
no evidence that CVC is interested in that CVC is interested in selling a
significant portion of its stake.
A source close to the situation said that “there are no real discussions with
Liberty and nothing is imminent anyway”.
CVC planned to reduce its stake to 30pc through an initial public offering on
the Singapore stock exchange in 2012, but the eurozone crisis put the brakes
on this.
Instead, it sold a 7pc stake to Waddell Reed for $500m which gave F1 an
enterprise value of $9.1bn and drove CVC’s return from the sport to more
than 350pc.
Earlier this month, it was reported that Mr Malone had approached CVC about
buying a stake in F1.
Liberty Media has spent nearly $30bn buying up European media assets,
including Virgin Media. A move into F1 would give Liberty an advantage over
rivals when bidding for televised sport rights.
In 2011, Rupert Murdoch’s News Corporation looked at buying Formula 1. BSkyB,
part owned by Mr Murdoch’s 21st Century Fox, owns the UK rights to televise
F1.
Mr Ecclestone stepped down from F1’s board last month after being told he
would stand trial in Munich on bribery charges, which he denies.