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Reuters) - The $100 billion Texas Teachers' pension fund is to buy a stake in
Formula One racing from the estate of collapsed investment bank Lehman Brothers,
a person familiar with the matter said.
The Teacher Retirement System of Texas will buy a 3 percent stake in the
motor racing business from the Lehman Brothers' estate in a deal worth about
$200 million, the person said.
It follows a string of powerful investors that have bought into Formula 1,
which organizes motor races across Europe, the Middle East, Asia and the
Americas, as owner CVC, one of Europe's largest buyout firms, gradually reduces
its stake.
BlackRock, Waddell & Reed and Norges Bank Investment management invested
in the company when public markets shunned a planned initial public offering of
the Formula 1 business.
Together with Texas Teachers, the investment groups will own some 30 percent
of the business.
Texas Teachers' deal for a portion of the Lehman Brothers stake values the
equity in Formula 1 at about $7 billion, the person said.
The private equity group refinanced Formula 1 earlier this year, raising $1
billion for future dividends to investors and acquisitions.
CVC assembled a majority stake in Formula 1 by 2006, buying out a number of
minority investors for undisclosed amounts.
It still owns 35.5 percent of the company run by Bernie Ecclestone, who has
been under investigation by German prosecutors in a bribery scandal, though no
charges have been filed against him.
Ecclestone denies wrongdoing and has said he was the victim of coercion by a
banker.
The sale of the 3 percent stake will be the first reduction in the Lehman
Brothers' holding in Formula 1 since the bank collapsed four years ago.
The Lehman estate still owns 12 percent in the business, which at the current
price is worth some $800 million.
The Texas Teachers' pension fund serves more than 1.3 million employed and
retired teachers and had net assets of $101 billion at end-September
2011.
The pension fund is one of the world's largest private equity investors and
has invested billions of dollars with firms including Apollo and KKR.
CVC declined to comment. The Teacher Retirement System of Texas and Lehman
were unavailable to comment.
(Editing by Douwe Miedema and Helen Massy-Beresford)
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