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MARCH 29, 2007

BRDC considers bid for Silverstone

Midlands property developer Oliver Speight is reported to have tabled a $110m offer to buy Silverstone from the British Racing Drivers' Club. The club has around 900 members and so there is no doubt that the members could each make huge financial gains if such a deal went ahead. The club is unlikely to agree to such a thing but it is quite possible that the members may conclude that they would be best served by selling the circuit and investing some of the money in a facility that was better suited to the needs of the members - and then splitting the remainder of the cash between them. The BRDC president Damon Hill says that the circuit is not for sale but if there are a sufficient number of votes in favour of a deal, that opinion could be overruled. The club is struggling to find a way to fund the redevelopment of the circuit demanded by the Formula One group and it also knows that without the Grand Prix Silverstone's value will be a lot less. Thus some members argue that it is a good moment to sell.

This is not unlike the argument that was put to Royal Automobile Club members in 1999 when Lex Service plc bought the club's motoring services offshoot for $660m. This meant that all 12,000 full RAC members received a pay-out of $55,000. The club retained its headquarters in London's Pall Mall and its 338-acre country club at Woodcote Park in Epsom, Surrey.

There is, therefore, a temptation for members to look seriously at the offer and turn their back on the grief that is associated with running Silverstone and the British Grand Prix.

Speight is obviously confident that he can make Silverstone pay and one must assume that this is with a Grand Prix as the race adds considerably to the prestige and earning potential of the circuit.

Speight's company Spectre Development was involved in the bidding for a lease for the circuit three years ago but was dropped early on in the bidding process. The deal struck with St Modwen for a 150-year lease on the property was rejected by the members although an element of that decision was objections to the way in which the deal was done.

Speight is believed to be including additional money in the deal to buy up more land around the track to enable him to make further changes to improve the earning potential of the venue.