DECEMBER 5, 2000
Kirch paid $550m for F1 share
According to sources in Germany Leo Kirch agreed to pay Thomas Haffa $550m for almost all of his 50% shareholding in Bernie Ecclestone's Formula One group of companies. The deal gave Kirch 49% of the company and left Haffa with just one percent. Haffa bought the shares in March for $712.5m and 10m EM.TV shares, which at the time were valued at around $88 each. Although those shares are now worth only $65m Haffa has still made a loss of over $200m on the deal. It is worth noting that Hellman & Friedman, one of the two companies from which Haffa bought the shares sold its EM.TV shares for an average of $66 which means that it recouped $495m on its outlay of $535m but our sources say that the other partner in the deal Morgan Grenfell Private Equity is still holding on to its 2.5m EM.TV shares, which are now worth only $16m. MGPE spent about $175m buying into the company and so is currently around $150m down on the deal.
The $550m deal for Kirch is a real bargain as Formula 1 revenues in a year are now around the $300m mark which means that the purchase will have paid for itself in about three years.
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