German media firm seeks damages from Ecclestone for F1 sale

Fri Oct 25, 2013 4:47am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Keith Weir

LONDON (Reuters) - Bernie Ecclestone's management of Formula One will face scrutiny next week when a German media firm seeks more than $100 million in damages over a deal that made CVC Capital Partners the motor sport's main shareholder.

The civil case in London's High Court is scheduled to open on Tuesday, a day after the diminutive Ecclestone turns 83. Despite his age, Ecclestone remains the hands-on chief executive of a business he has helped to turn into a global money-spinner over the last four decades.

German company Constantin Medien will argue that Ecclestone and three other defendants deliberately undervalued Formula One when private equity fund CVC bought into the business in 2005.

The legal fallout from the sale has already seen a former German banker jailed in Munich, complicated plans to float Formula One on the stock market and brought the Ecclestone succession issue into focus.

Germany's BayernLB was one of the banks left in control of Formula One a decade ago after the collapse of Bavarian Leo Kirch's media empire, which owned the rights. BayernLB sold a stake of 47 percent to private equity firm CVC for around $830 million in 2005.

As the successor company to a former Formula One shareholder, Constantin says it missed out on a share of the additional proceeds had the stake fetched a higher price.

The damages claim compares with a market capitalization of around 137 million euros ($189 million) for Constantin, a sports-focused media group based in southern Germany.

BUSINESS AS USUAL   Continued...

Formula One supremo Bernie Ecclestone (R) is pictured during the third practice session of the Hungarian F1 Grand Prix at the Hungaroring circuit in Mogyorod, near Budapest July 27, 2013. REUTERS/Laszlo Balogh