EM.TV sells 24.5% SLEC stake to Kirch

Cos. pool SLEC assets into Speed Investment Ltd.

BERLIN — Germany’s EM.TV has sold a 24.5% stake in Formula One holding outfit SLEC to media giant Kirch for DM1.3 billion ($586 million), taking a major step toward digging itself out of debt.

Within a few days, EM.TV intends to pay off about $120 million still owed for the purchase of the Jim Henson Co.

Following the deal, EM.TV has a 38.25% stake in SLEC; Kirch holds 36.75%. Formula One topper Bernie Ecclestone has the remaining 25%.

Kirch bailed out the embattled EM.TV in February. It recently backed EM.TV in exercising a joint option to buy another 25% of SLEC to reach their current 75% stake. On Friday, that deal received approval from Germany’s antitrust watchdog.

Pooled assets

Companies have pooled their SLEC assets in a company called Speed Investment Ltd. German authorities ordered Kirch to put German TV rights to Formula One races in a separate company to auction them.

While Kirch, or a subsidiary, could buy the rights from this company, such a move would constitute a merger and would be subject to approval, regulators said. Kirch’s acquisition of the SLEC stake from EM.TV is subject to that condition.

Kirch and EM.TV reportedly have been in talks with Formula One automakers to end a deadlock over the sport’s future. The manufacturers had threatened to set up their own motor racing circuit if Kirch moved Formula One to pay TV. Kirch has promised to keep the races on free TV.

Kirch has another regulatory hurdle to get by: Authorities have yet to greenlight Kirch’s purchase of voting rights in EM.TV. Government watchdogs say final approval could take months.

(Reuters contributed to this report.)

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