JULY 24, 2005
Is there a buyer out there for FOM?
The Daily Telegraph in London is reporting that Hutchison Whampoa, the Hong-Kong based conglomerate controlled by the tycoon Li Ka-shing, is preparing a $1bn bid to buy control of the Formula One group. The talks have been carried out between the Tom Group, a Chinese-language media company which was founded in 1999 as a joint venture between Hutchison Whampoa and Cheung Kong Holdings, and the three banks involved in F1. The Tom Group is listed on the Hong Kong stock exchange.
According to the sources close to the talks, Hutchison wants to add F1 to its media empire because of the vast potential it sees for the sport in the Asian markets.
The reports suggest that the banks will happily sell but that Bernie Ecclestone is proving harder to convince. The problem with all of this is that buying the banks and Ecclestone out of the business will not solve the problem of the teams wanting a bigger share of the revenues. The more the teams get the less interesting is the purchase for Hutchison Whampoa. And while Bernie Ecclestone is trying to come up with what looks like a better offer for the teams, they know that if they stick together they can get 100% of the revenues. At the moment Ecclestone has deals with Ferrari, Red Bull Racing and Jordan but everyone else is saying they would rather run their own business than do business with FOM again.
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