BERLIN — Just hours before the midnight Wednesday deadline, German kidvidder EM.TV and shareholder the Kirch Group confirmed they will exercise a $1 billion call option for a further 25% of SLEC, the holding company of Formula One racing.
EM.TV is financing the option with the help of media giant Kirch, which last month agreed to buy a 17% stake in EM.TV, plus half of its 50% stake in Formula One. Under the new deal, the two companies will own 75% of Formula One.
There had been growing opposition from Formula One founder Bernie Ecclestone and a consortium of racing car makers, who feared broadcaster Kirch wanted to show the sport on its money-losing pay TV channel, Premiere World, to boost subs.
However, Kirch said Wednesday the sport would continue on free-to-air TV.
Kirch owns both free TV stations in Germany as well as controlling the German pay TV market. It is not clear whether the Intl. Automobile Federation, which opposes the deal, has the right to block it.
EM.TV said Wednesday it is in talks with car manufacturers to sell part of the stake in SLEC. Kirch said Saturday it had confirmed financing for the deal but failed to name the lenders. EM.TV closed the day down 1.98% at 6.93 euros ($6.36).
Deal is subject to various approvals.