Liberty Media has made headlines with its recent announcement regarding the sale of a portion of its stake in F1 to fund its ambitious MotoGP acquisition.
The F1’s commercial rights holder announced on Thursday it would sell approximately 10 million shares of its F1 stock, valued at $825 million, to partially fund its MotoGP acquisition.
The deal, which is expected to close by the end of 2024, involves Liberty Media acquiring an 86% stake in MotoGP’s commercial rights holder, Dorna Sports, for a total valuation of around $4.2 billion.
The shares, priced at $77.50 each, will not only raise capital for the MotoGP deal but also assist in general corporate purposes, including debt repayment.
A statement from Liberty Media reads: “Liberty Media Corporation announced today that it has priced the previously-announced public offering of 10,650,000 shares of its Series C Liberty Formula One Common Stock (“FWONK”) at a public offering price of $77.50 per share.
“Liberty Media also granted the underwriter of the offering an option to purchase up to an additional 1,597,500 FWONK shares.
“The offering is expected to close on August 22, 2024, subject to the satisfaction of customary closing conditions, and is expected to result in approximately $825,375,000 in gross proceeds to Liberty Media, before deducting the underwriter’s discounts and estimated offering expenses payable by Liberty Media.
“Liberty Media intends to exercise its option to deliver additional cash in lieu of shares of FWONK as part of its previously disclosed proposed acquisition (the “Acquisition”) of Dorna Sports, S.L., such that all the consideration paid will be comprised of cash and no shares of FWONK will be issued to the sellers.”
The announcement comes after the company confirmed in April it was purchasing Dorna Sports from Bridgepoint and Canada Pension Plan Investment Board. They are buying 86% of the series in a deal which values the premier bike racing series at £3.59bn ($4.2bn).
The sale of these shares marks a significant financial maneuver for Liberty Media, reflecting its strategic approach to funding large-scale acquisitions. While the $825 million raised is a substantial amount, it represents only a fraction of the total cost required for the MotoGP acquisition, which is estimated at $4.2 billion.
As part of the acquisition process, the American media company has already secured necessary regulatory approvals in key jurisdictions, including Italy and Spain, as well as merger clearances in Brazil and Australia. The smooth progression through regulatory channels bodes well for the timely completion of the MotoGP deal by the end of 2024.
“The transaction is progressing well,” Liberty Media’s CEO Greg 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.”
The American media company purchased F1 in 2017 and ever since the sport has significantly grown in popularity under the new management’s innovative use of social media and marketing with Drive to Survive on Netflix being a popular example.
Earlier this month Liberty announced F1 generated £682m ($871m) in revenue over the second quarter of this year, an increase of 20% compared to 2023 where the series generated £2.5 billion ($3.2bn) in revenue.
