Muppet owners buy Formula One

Formula One is among the most lucrative of sports

A German media company which recently bought the rights to TV's The Muppets is to pay £1.1bn for a 50% stake in Formula One.

EM.TV & Merchandising, based in Munich, is buying half of SLEC, the parent company of the world's best known motor racing contest.

The group also has an option to buy another 25% of the company over the next 12 months.

It is buying the stake from British and American venture capital companies Morgan Grenfell Private Equity and Hellman and Friedman.

Long time Formula One chief Bernie Ecclestone retains the other 50% stake in F1 through a family trust.

No interference pledge

Thomas Haffa, chairman and founder of EM.TV, said: "This agreement represents the single most important deal in our company's history - it means we will be involved in the marketing of one of the most interesting and lucrative sports entertainment events in the world."

EM.TV last month bought up The Jim Henson Company for £435m, gaining it ownership of all the Muppet characters and programme archives.

Bernie Ecclestone said: "I believe their involvement will add value to the company with their merchandising expertise and their go-ahead approach to business."

The 16 races of the 1999 Formula One season were broadcast in 200 countries and there are plans to expand the sport into new markets.

A spokeswoman for EM.TV said the company had no intention of intervening in the TV rights negotiations.

"We will have seats on the board, but the TV rights are so well managed there is nothing we would want to do."

EM.TV has been one of the darlings of Germany's stock, and its shares gained sharply on the news of the Formula 1 deal.

However, a short while later broker WestLB Panmure placed some three million shares on the market, driving down the price.

The stock ended the day 4.85 euros or 5% lower at 91.15 euros.