NEW YORK (The Deal) -- Cable billionaire John Malone has held talks with European private equity house CVC Capital Partners over the possible purchase of its 35% stake in racing business Formula One, according to a source familiar with the situation, and has also reportedly shown an interest in a further 14% of the company.
Whether the talks are ongoing or how far they have progressed since the initial approach was made around Christmas is not clear, but no formal offer has been made and CVC is still looking at alternative options.
CVC is the largest shareholder, despite its minority position, and has been looking for an exit opportunity for some time, either via a float or a sale. Reports on Tuesday said that a sale could value F1 at more than $9 billion, including debt.
CVC began preparations for an exit on the Singapore Stock Exchange in 2012, but a combination of poor markets and the legal troubles of F1 founder Bernie Ecclestone forced it to put the listing on ice.CVC also sold part of its stake in 2012 to a consortium of U.S. asset managers Waddell & Reed Financial (WDR - Get Report) and BlackRock (BLK - Get Report) as well as Norges Bank Investment Management, the manager of the Norwegian government global pension fund. The sale reduced CVC's stake to below 50% and helped it recoup money invested in the business when it bought F1 for $3.5 billion in 2005 and 2006. Altogether, CVC has reportedly made 5 times its $1 billion equity investment. Any deal with Malone's Englewood, Colo.-based media empire would be a blow to longstanding rival Rupert Murdoch and his 21st Century Fox group, which has in the past taken an interest in the motor racing business and currently has the rights to broadcast F1 on a dedicated channel on its 39% owned British Sky Broadcasting. In 2011, Murdoch made a joint approach with Italian investor Exor, a listed investment vehicle of the Agnelli family which has a historic stake in automaker Fiat and indirectly in the Ferrari F1 racing team. A spokeswoman for 21st Century Fox declined to comment on a possible counter-approach to CVC or the possible implications for BskyB or its Sky Sports channels. Malone, whose holdings include Liberty Global, Liberty Media (LMCA - Get Report) and Discovery Communications, has been on a multibillion-dollar spree in Europe in the past two years, acquiring Britain's Virgin Media, Germany's Kabel and, in the Netherlands, Ziggo. Liberty Global spokesman Bert Holtkamp also declined to comment.
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