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Bernie and the car companies

THE recent days have seen a number of quiet meetings between Formula 1 boss Bernie Ecclestone and representatives of the European car manufacturers who are trying to acquire a shareholding in SLEC, the holding company of the Formula One group of companies. The car companies have also had meetings with Ecclestone's partner Thomas Haffa of the German media firm EM.TV.

Haffa is keen to sell his shares in SLEC in an effort to bolster the falling share price of EM.TV. The company has halved in value in the last two weeks. The firm has named Rolf Rickmeyer as its new chief financial officer in an effort to improve confidence in the company. Rickmeyer replaces Florian Haffa, Thomas's brother who has now become deputy chief executive. Rickmeyer comes from an affiliate of the giant RWE company.

The whole EM.TV empire is now valued at only $3.5bn, which is just over double what Haffa paid for his share of SLEC. If the share price continues to fall he will become increasingly vulnerable to a takeover as the costs of a bid could be offset by the sale of his cartoon library and merchandising deals. These would be very valuable for a firm such as Walt Disney or AOL Time Warner.

Our understanding is that the talks going on at the moment will result in a three-tiered system of shares in SLEC with the C shares being made available to team owners, B shares being issued to manufacturers who are supplying engines in F1 (such as BMW and Honda) who A shares to manufacturers which own teams (DaimlerChrysler, Fiat, Renault and Toyota). We hear that the deal is sufficiently well-advanced for due diligence to be taking place. This is being done by Nigel Carrington, the managing-director of TAG McLaren Holdings.

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