The commercial rights holder of Formula 1 announced in early April that it would acquire Dorna, the organisation that owns the commercial rights to MotoGP.
The agreement saw Liberty Media take an 86 percent stake in the Spanish company in a deal worth AUD $5 billion (€3.017 billion), valuing the company at $6.9 billion.
That would be paid in a combination of at least €2.282 billion in cash with the balance, approximately AUD $1.22 billion (€735 million), in Formula 1 shares (FWONK).
However, a prospectus issued by Liberty Media reveals its intent to divest 10,650,000 shares of Series C Liberty Formula One common stock (FWONK) at an offer price of AUD $115.090 (USD 77.500).
That translates into a total capital injection of more than AUD $1.21 billion (almost €733 million).
It’s a figure that neatly tallies with those laid out in the prospectus with regard to the use of cash in lieu of stock, which is acknowledged in the prospectus.
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“We expect to use the net proceeds from this offering to fund the increase in total cash consideration to be paid to the Sellers in the Acquisition.”
However, it adds that should the stock not sell, it would not delay the acquisition of Dorna.
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Speaking on a recent investors call, Liberty Media CEO Greg Maffei revealed the transaction had received clearances in key jurisdictions.
“The transaction is progressing well,” Maffei revealed.
“Regulatory filings are progressing on track.
“We’ve received foreign investment control clearance in both jurisdictions needed, Italy in Spain, and we recently received merger clearance in Brazil and Australia.
“We continue to expect the transaction to close by year-end.”
Once complete, the MotoGP business will sit within the broader Formula 1 Group operation, though function entirely independent of the four-wheeled world championship.
That is a requirement for the deal to receive regulatory clearance to avoid antitrust concerns that might arise from common ownership of the world’s leading two- and four-wheeled motorsport competitions.
In addition to the 10.65 million shares on offer, there is a further option for almost 1.6 million shares at the same offer price.
That could take the total raised to almost AUD $1.4 billion (USD $938,504,200).
With a conservative estimate putting F1’s value at AUD $26.6 billion (USD $17.9 billion), the sale of 10.65 million shares represents around five percent of the business.
The sale of FWONK stock is the latest move in what has been viewed as Liberty positioning itself to exit F1.
It was announced earlier this week that MotoGP has dropped Qatar as the season opener next season, with the Thai Grand Prix now set to start the campaign.
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