EM.TV Receives Letter of Intent On F1 from Carmarkers

German media group EM.TV & Merchandising said on Wednesday it had received a letter of intent from car manufacturers stating their interest in buying a stake in Formula One holding company SLEC.

EM.TV Receives Letter of Intent On F1 from Carmarkers

German media group EM.TV & Merchandising said on Wednesday it had received a letter of intent from car manufacturers stating their interest in buying a stake in Formula One holding company SLEC.

Spokesman Michael Birnbaum confirmed an article released ahead of publication in German magazine Focus Money in which EM.TV Chief Executive Thomas Haffa said his firm had received a letter of intent from the European car makers association ACEA.

"The concrete talks will begin within the next few days," Birnbaum said.

The spokesman also said that EM.TV, which currently owns half of SLEC, has an option to buy a further 25 percent stake in the holding from co-owner Bambino Trust, which is controlled by Slavica Ecclestone, wife of Formula One mogul Bernie Ecclestone.

Despite the option, Birnbaum said EM.TV is seeking an ownership structure of SLEC in which it, the car manufacturers and Ecclestone will each own a 33 percent stake.

The ownership structure deal should be closed before the end of this year, EM.TV Chief Financial Officer Florian Haffa told Reuters.

EM.TV is currently seeking a replacement for Haffa, who will become deputy chief executive with particular responsibility for investor relations.

Birnbaum said seven to eight manufacturers were represented in ACEA, including DaimlerChrysler and Ferrari .

Other manufacturers include Ford , Renault , BMW and Peugeot , although the latter will pull out of Formula One racing at the end of the season.

By 1637 GMT shares in EM.TV were 6.68 percent up to 38.94 euros but the stock has not fully recovered from Monday's thirty percent slide after the company revised down its first half sales after it discovered that certain sales should not yet have been booked.

Bernhard Tubeileh, an analyst at Merrill Lynch in Frankfurt, said the drop on Monday was exaggerated.

"Fundamentally, the stock belongs in a totally different region," Tubeileh said, adding he had a 90 euros price target on the company.

Major Share Sales

Birnbaum earlier said that two major shareholders in EM.TV had sold over seven percent of its shares in recent months.

He said the Henson family, which owns shares in EM.TV through the group's purchase earlier this year of The Jim Henson Company - producer of The Muppets Show - had sold 3.8 million EM.TV shares this summer.

The Henson family currently holds 5.3 million shares, which are locked-up until March next year, Birnbaum said.

He also said that U.S. investment company Hellman & Friedman had sold 5.3 million shares to two strategic investors in recent weeks.

Hellman & Friedman and Morgan Grenfell Private Equity obtained around 10 million EM.TV shares after the German company bought a 50 percent stake in Formula One holding company SLEC, in which the investment firms previously owned stakes.

Morgan Grenfell still possess 4.1 million EM.TV shares. Birnbaum said he expected no further share sales.

The two bundles of shares total 9.1 million, which is 7.3 percent of EM.TV's 124 million total shares.

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