Why is Liberty Media selling 10 million F1 shares? Between MotoGP and sale idea
09/07/2024 07:33 AM
The purchase of MotoGP
On April 1st, Liberty Media officially confirmed what had been rumored for some time: the American media giant acquired the majority share package of MotoGP, the top category in motorcycle racing. Liberty Media secured 86% of the shares previously owned by Dorna, with the purchase valued at $4.2 billion.
As is well known, the Americans are now waiting for approval from various national antitrust authorities to finalize the acquisition, given the risk of creating a motorsport monopoly due to their joint ownership of Formula 1. Recently, President Greg Maffei reassured on this point: “The operation is proceeding well, and the regulatory processes are progressing as expected. We anticipate closing the transaction by the end of the year.”
The sale of F1 shares
When it comes to financial giants and public companies, it's not uncommon to see actions aimed at raising more immediate liquidity. This is the context in which the sale by Liberty Media of over 10.6 million FWONK shares (those related to the F1 package) at a unit price of $77.50 should be viewed. In this way, Liberty Media will secure a capital injection of $825 million, which it intends to use to finance the purchase of MotoGP by increasing the cash portion of the deal instead of using FWONK shares: “We plan to use the net proceeds to finance the increase in the total cash payment to the sellers for the acquisition,” the American company confirmed.
However, some financial analysts speculate that the sale of FWONK shares related to the Formula One Group could be a further strategic move in anticipation of a future sale of Formula 1 by Liberty Media. For years, there have been rumors of the Saudi Arabian sovereign wealth fund being interested in acquiring the top motorsport category, with the latest inquiry reported in early 2023.
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