State teachers have stake in the sale of F1
Teacher Retirement System owns about 3 percent of series.
Like a crusty octogenarian, a glamorous pair of jet-setting heiresses, a European-based private equity firm, the Parisbased world motor sports governing body, the central bank of Norway and a part of the infamous Lehman Brothers firm that just won’t die, Texas teachers are waiting to see what happens with the recently announced plans for the sale of Formula One to Liberty Media.
Well, not the teachers per se, but the Teacher Retirement System of Texas. Through a spokesperson, TRS said shortly after the sale was announced, “TRS is reviewing its options with regard to the announced transaction. TRS has rights to participate in the sale.”
TRS is rarely mentioned as an owner of Formula One’s parent company, Delta Topco, but four years ago the pension fund purchased a $200 million stake in the company, which amounts to about 3 percent.
That’s slightly more than shares owned by New York City-based investment giant BlackRock, which manages about $5 trillion in various assets, and makes the TRS one of the eight biggest investors in F1, according to figures recently published by Christian Sylt, a journalist who specializes in Formula One finances. TRS’ stake is just a tad less than J.P. Morgan’s interest. Norges Bank owns about a 4.4 percent share from a $300 million investment.
Bernie Ecclestone, the 85-year-old Formula One boss, still clings to just over 5 percent. His family trust designed to sustain freespending daughters Tamara and Petra, Bambino Holdings, has an 8.4 percent interest. Although Lehman Brothers announced that it would be out of the F1 business by 2014, it has a 12.2 percent stake even after selling 3 percent to TRS four years ago.
Asset management and financial planning company Waddell & Reed is a major player with 20.7 percent, and CVC has been the controlling partner with 34.6 percent. In 2006, CVC acquired Formula One, which was then valued at about $1 billion, as part of the $7.3 billion CVC European Equity Partners IV fund. TRS invested $126 million in that fund. FIA, the governing body of world motor sports, has a 1 percent share of Delta Topco.
Last month, Liberty Media, which owns interests in everything from the Atlanta Braves to SiriusXM Radio to Live Nation, said it had acquired 18.7 percent of Delta Topco from CVC and planned to acquire 100 percent of F1’s parent company. Liberty Mutual said the deal had an enterprise value of $8 billion and an equity value of $4.4 billion.
However, the deal — a mix of cash, stock and debt — looks as if it might have to pass muster with a few regulatory agencies. One possible hurdle is what could be a conflict of interest. FIA is supposed to regulate Formula One but with its 1 percent share could profit from the sale.
Liberty Media said it plans to complete the deal by early next year. Until then, everyone from heiresses to schoolteachers will have to wait to see how it all shakes out.