DECEMBER 6, 2000
Could the EM.TV crash hurt Arrows?
AS investors begin to take stock of the situation after the collapse of EM.TV's value, the investors in the Deutsche European Partners fund, which is run by Morgan Grenfell Private Equity, are trying to discover how much money the fund has lost as a result of its F1 involvement in the deal.
The collapse of the EM.TV share price means that $220m worth of shares in March are now worth only $17.5m and a $450m share in EM.TV now has a value of just $35m.
Thus if Morgan Grenfell is still holding on to the shares it has made a loss of between $240m and $300m. If the deal with EM.TV was for shares only MGPE has spent $275m and has only $35m worth of shares left - a loss of $240m. If it took some cash with the shares the loss would be just over $300m.
An MGPE spokesman has declined to comment on whether the fund still holds all the EM.TV shares.
What will be interesting now is to see whether there are any changes of management at MGPE as a result of the EM.TV crash and whether this will have any effect on MGPE's other involvement in Formula 1 as a 50% shareholder in the Arrows team which the team indicated at the time was worth as much as $60m.