Wednesday February 21st, 2001
Shares in German media company EM.TV & Merchandising fell almost 15 percent on Wednesday after news its rescue deal by rival Kirch might not be approved by the FIA.
Concerted opposition from the FIA could threaten a deal which would see Munich-based television magnate Leo Kirch acquire a major stake in the company which runs Formula One motor racing.
Shares in EM.TV had dropped 9.93 percent to 6.35 euros at 1522 GMT after reaching a 6.01 euros intraday low.
"Formula One is the only asset of some value that EM.TV owns," said a trader.
The share is trading about 95 percent below its 120 euros all-time high following a collapse in the share price triggered when the debt-laden former Neuer Markt star slashed earnings forecasts late last year.
FIA President Max Mosley said late on Tuesday he was against a deal which would hand Kirch 25.1 percent of EM.TV's voting rights and almost half of EM.TV's 50 percent stake in Formula One holding company SLEC.
As part of the deal, which requires the approval of FIA's general assembly, Kirch would also back a loan to enable EM.TV to exercise an option to buy a further 25 percent in SLEC for about $1 billion.
Mosley said it was not good for Formula One and added that he would like to see a consortium of five leading grand prix car makers purchase a stake in SLEC.
Bernie Ecclestone, who currently owns the other half in SLEC, has also told the media that he is against the Kirch media empire buying the stake in SLEC.
Kirch itself tried to soothe any objections from Mosley and Ecclestone on Wednesday, saying it was open to discussions to solve the dispute.
"If Ecclestone desires this and if the car makers are interested in this, Kirch will not close itself to an agreed solution," spokesman Hartmut Schultz told Reuters.
A deal giving Kirch a significant stake in SLEC could weaken the Formula One holding company's position when it negotiates broadcasting rights in Germany, as Kirch owns several of the country's main private television channels.
On Tuesday, Ecclestone was quoted as saying he had been asked by car makers to look into the possibility of establishing an alternative racing series.