Liberty to Increase Formula 1 Deal Cash Payout

A day after securing the final regulatory approval for its $4.4 billion purchase of Formula 1, Liberty Media said it will issue $400 million in senior notes in a private offering to increase the cash portion of the deal.

Liberty received approval from the Fédération Internationale de l'Automobile (“FIA”), the governing body of Formula 1 racing, on Jan. 18, the last regulatory hurdle for the deal. Liberty, which first announced the purchase in September, has said it plans to close the deal by the end of the month.

The cash convertible senior notes will be used to increase the cash portion of the deal to the selling shareholders by $400 million and retain in treasury the 19 million shares that would otherwise have been issuable to the selling shareholders based on the per share purchase price of $21.26. These Liberty Media shares will be reserved by Liberty for issuance to the F1 teams at a per share purchase price of $21.26.

“We think it’s important to offer the teams the chance to invest in F1 and further align our interests,” Liberty Media CEO Greg Maffei said in a statement. “We look forward to working with the teams to increase the appeal of this iconic sport and enhance the F1 business.”

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