MAY 22, 2001
Kirch to increase his share in SLEC
GERMAN media baron Leo Kirch says that he is going to increase his shareholding in SLEC - the holding company which controls the Formula One group of companies. This will involve Kirch taking up an option to buy 25% of the company which is currently held by Thomas Haffa's EM.TV. Kirch obtained the option when he bailed out the company during the winter months. This will mean that Kirch will increase his shareholding to 61.75% and EM.TV's share will drop to 13.25%. The shares belonging to the Ecclestone Family will remain at 25% with Ecclestone remaining in charge as part of what is believed to be a five-year deal with Kirch.
The move will not help matters with the car manufacturers, who do not want Kirch in control of the business, but the purchase may be in preparation for the sale of a substantial percentage of the company to the automobile firms. They are believed to want at least 60% of the company so that they can recoup some of the money they invest in Formula 1. It is possible that Kirch might sell a large chunk of his shares (if the price is right) because this would still leave him with a share of the business via EM.TV as he still owns 25% of the company's voting rights and has an option to buy Haffa's EM.TV shares to add to the 17% of the business that he already owns.
Thus it could end up that the car manufacturers pay Kirch a couple of billion dollars to get control of the business. As part of the deal Kirch could insist that the car manufacturers given assurances that they will remain in F1. He will then take a share of the profits through EM.TV's remaining shareholding. It is possible that in the longer term he might also do a deal with the Ecclestone Family to acquire its remaining shares which would give him 38.25% and the car makers 61.75%.
Whatever the case, we have not heard last of Kirch and the car companies...
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