Liberty Media has announced the sale of an $825 million stake in Formula 1 to finance its purchase of MotoGP.
In April, it was announced that Liberty would acquire 86% of the shares of Dorna Sports, the Spanish company that has owned MotoGP since 1992. The deal was valued at $4.2 billion, with the remaining stake to be retained by MotoGP’s current management.
The sale of more than 10 million shares, at a price of $77.50 per share, will allow Liberty to raise the proceeds needed to complete the Dorna transaction, although a portion of the proceeds will be used for corporate purposes, including debt repayment.
On Thursday, a statement from Liberty Media confirmed the share sale: “Liberty Media Corporation today announced that it has priced its public offering of 10,650,000 shares of its Series C Liberty Formula One Common Stock (“FWONK”) at $77.50 per share. Liberty Media has also granted the underwriter of the offering an option to purchase up to an additional 1,597,500 shares of FWONK.”
“The offering is expected to close on August 22, 2024, subject to the satisfaction of customary closing conditions, and Liberty Media is expected to receive approximately $825,375,000 in gross proceeds, before deducting underwriters’ discounts and estimated offering expenses borne by Liberty Media.”
Marc Marquez, Gresini Racing, Carmelo Ezpeleta, CEO Dorna Sports
Photo by: Gold and Goose / Motorsport Images
“Liberty Media intends to exercise its option to deliver additional cash in lieu of FWONK shares in its previously disclosed proposed acquisition of Dorna Sports, SL, such that all of the consideration paid will be in cash and no FWONK shares will be issued to the sellers.”
Confirmation of the agreement with Dorna has dragged on longer than either party would have liked, as they had already agreed on the terms for some time and had initially wanted to announce the news before the start of the 2024 MotoGP season in March.
Liberty has rebuffed interest from companies such as Qatar Sports Investments, the country’s sovereign wealth fund, and TKO, owner of the Ultimate Fighting Championship and World Wrestling Entertainment, to add MotoGP to its portfolio.
“We are thrilled to expand our portfolio of live sports and entertainment businesses with the acquisition of MotoGP,” said Greg Maffei, chairman and chief executive officer of Liberty Media, when the deal was announced.
“MotoGP is a global championship with a loyal and enthusiastic fan base, exciting racing and a highly cash-generating financial profile. Carmelo (Ezpeleta, CEO of Dorna) and his team have built a great sporting spectacle that we can expand to a wider global audience.”
Since acquiring Formula 1 in 2016, Liberty has overseen a boom period for the series, as interest has reached an all-time high, boosting value and revenue streams. Liberty hopes to achieve similar success with MotoGP, where Ezpeleta and his son Carlos (sporting director) will remain involved.
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