A Busy Week of Politics
It has been quite a fortnight for Formula One's administrators, has it not? First came the announcement that CVC Capital Partners had reached an agreement with SLEC - or most of the sport's controlling entity, in any event - to gain a majority interest in the operation owned 75% by a trio of banks and 25% by Bernie Ecclestone's family's trust, Bambino. Inherent in the deal was the formation of a new vehicle, Alpha Prema.
Making up Prema Alpha were the shares of Ecclestone and of Bayerische Landesbank, the latter holding 52.5% of the total; excluded from the deal, according to a release issued by CVC on 25 November, were the shareholdings of Lehman Bros and JP Morgan, each of whom held a sliver under 14% of SLEC. Thus Alpha Prema would hold 72% of SLEC and be managed day-to-day by Ecclestone, whose Bambino trust was expected to make a re-investment in Formula One, whilst Gerhard Gribkowsky, the Bayerische board member who had been chairman of SLEC, too, would, rather inexplicably, be on the board of Alpha Prema.
Last week this column ventured that the minorities had little say (or influence) in the take-over, and that they were effectively in a put-up or shut-up situation. In common with the rest of Formula One's media, we were dead wrong in this regard: no sooner had these US banks convened after the Thanksgiving weekend - amid accusations that CVC's announcement had been conveniently timed to coincide with America's national holiday - than they disclosed that they held first-option over any sale of SLEC shares. Their options were, they indicated, potential breakers of the deal.