Private equity firm CVC is conducting a strategic review of Formula One, the operator of the motor racing Grand Prix series, for a potential sale, IPO or debt refinancing, several sources familiar with the matter said.
A number of would-be buyers have expressed interest in Formula One's future ownership, including private equity firms, sovereign wealth funds and other media businesses, one of the sources said.
No decision has been made and the strategic review is part of a regular assessment of CVC's portfolio businesses, he added.
Formula One and CVC declined to comment.
A sale is CVC's preferred option, a second source familiar with the matter said, adding that the private equity firm was not sure whether it would fetch the right price for the business in the current environment.
"CVC would love to sell it (Formula One) but they're not sure if they can get the right price at the moment," the second source said.
CVC recapitalised Formula One's $2.92 billion debt at the peak of the market in 2007 to pay itself a dividend, according to Thomson Reuters LPC data.
The loan has a low interest margin of only 200 basis points (b.p.) over LIBOR, compared with current rates of 425-475 b.p on leveraged loans.
"A sale would suit the lenders as the existing financing is very cheap," an investor in Formula One's loan said.
POSSIBLE DELAY
CVC's sale of Formula One could be complicated by a dispute involving allegations of kickbacks relating to its original purchase of a 48 percent stake in Formula One from Bayerische Landesbank in 2005.
CVC bought a 75 percent stake in SLEC, the company that controlled Formula One's commercial rights in 2005.
CVC topped up its stake by buying JP Morgan's interest in the Formula One Group in 2006, which gave it 86 percent of the company and gained 100 percent ownership in 2006 when it bought Lehman Brothers' stake.
Formula One Grand Prix series got underway in Melbourne Australia last weekend after the season opener in Bahrain was cancelled over anti-government protests.
A number of would-be buyers have expressed interest in Formula One's future ownership, including private equity firms, sovereign wealth funds and other media businesses, one of the sources said.
No decision has been made and the strategic review is part of a regular assessment of CVC's portfolio businesses, he added.
Formula One and CVC declined to comment.
A sale is CVC's preferred option, a second source familiar with the matter said, adding that the private equity firm was not sure whether it would fetch the right price for the business in the current environment.
"CVC would love to sell it (Formula One) but they're not sure if they can get the right price at the moment," the second source said.
CVC recapitalised Formula One's $2.92 billion debt at the peak of the market in 2007 to pay itself a dividend, according to Thomson Reuters LPC data.
The loan has a low interest margin of only 200 basis points (b.p.) over LIBOR, compared with current rates of 425-475 b.p on leveraged loans.
"A sale would suit the lenders as the existing financing is very cheap," an investor in Formula One's loan said.
POSSIBLE DELAY
CVC's sale of Formula One could be complicated by a dispute involving allegations of kickbacks relating to its original purchase of a 48 percent stake in Formula One from Bayerische Landesbank in 2005.
CVC bought a 75 percent stake in SLEC, the company that controlled Formula One's commercial rights in 2005.
CVC topped up its stake by buying JP Morgan's interest in the Formula One Group in 2006, which gave it 86 percent of the company and gained 100 percent ownership in 2006 when it bought Lehman Brothers' stake.
Formula One Grand Prix series got underway in Melbourne Australia last weekend after the season opener in Bahrain was cancelled over anti-government protests.
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