Liberty Media has declared an important operational move to source the money for the MotoGP acquisition, the divestment of an 11. 72% stake in Formula 1. This is in tune with Liberty’s plans to diversify its range of international sporting assets as the remainder of the amount will be used to finalise the acquisition of Dorna Sports, the Spanish company that has owned MotoGP since 1992.
In April 2024, Liberty Media unveiled that it intended to buy 86% of Dorna Sports’ share stock, which was estimated at $4. 2 billion. The rest of the shares in the company will be with the MotoGP management to retain the consistency of the sport. The buyout of the company known as Dorna Sports by Liberty Media is expected to be a correct move given the increasing global appeal of MotoGP.
Private Placement to Support the Acquisition
The funding for this acquisition will see Liberty Media selling over 10 Million shares of Liberty Formula One Common Stock at $ 77 per share. That is Series C Liberty Media Formula One Common Stock 50 per share. The firm forecasts that this sale will realize gross proceeds of about $825 million, which besides funding the acquisition of Dorna, will also be used to fund other corporate needs, such as paying off some debts. An additional 1. 100 targeted permits, may also be sold and up to six million shares are also indicated as offering additional financing opportunities.
Liberty Media later issued a statement affirming the sale of the shares with a focus on the firm’s intention to use the proceeds of the sale in the acquisition of Dorna Sports Limited. The statement also included the fact that the sellers could not be issued FWONK shares, for the acquisition consideration would be solely in cash.
Issues and Rivalry in the Acquisition
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The acquisition process was characterized by some time lag, whereby, there was consensus about certain terms for some time but no closure on the acquisition until we were now getting it. MotoGP was not easy to obtain for Liberty Media as there was fierce competition from other big companies such as Qatar Sports Investment.
President and CEO of Liberty Media Greg Maffei joined the company expressing his view, he stated that
We are thrilled to expand our portfolio of leading live sports and entertainment assets with the acquisition of MotoGP, Greg Maffei
MotoGP has a very strong financial performance and a fantastic management team headed by Carmelo Ezpeleta.
A Proven Track Record in Sports Management
After purchasing Formula1 in 2016 the American company Liberty Media changed the series and brought unprecedented attention and financial success globally. The same goal is now attempted with MotoGP where the key objectives are expansion of its audience and improvement of its general popularity. Ezpeleta and his son Carlos, who is the sporting director of MotoGP, will continue to work as the administrators of the sport under Liberty’s ownership.
By this acquisition, Liberty Media consolidates itself as one of the leading companies in the global sports market with the potential to apply its knowledge to catalyze more success of MotoGP.
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