Kirch drives EM.TV, Formula One deal
Media group receives bank guarantees for $1.5 billion
Kirch said it had received guarantees for $550 million to buy the 25% stake in SLEC currently owned by EM.TV as well as for $987 million for an option to purchase a further 25%.
EM.TV now owns 50% of SLEC. The other half is controlled by racing mogul and Formula One founder Bernie Ecclestone. Kirch recently acquired a near 17% stake in EM.TV and almost half of the troubled company's 50% share in SLEC.
The option could leave Kirch and EM.TV with a 75% share in the company.
Ecclestone and the Intl. Automobile Federation (FIA) oppose the deal, which needs the approval of the FIA's general assembly of presidents of 157 motor sports orgs from 118 countries.
At least four banks had reportedly denied Kirch a loan to finance the stake because Ecclestone has said he would veto the Kirch/EM.TV rescue deal.
SLEC owns the broadcasting rights to Formula One until 2010. German industry watchers suggest Kirch may want to use those rights to boost subscribers to its money-losing pay TV channel, Premiere World.
Both Ecclestone and FIA head Max Mosley have said they would like a consortium of five leading Grand Prix automakers to purchase a stake in SLEC.
Kirch is also seeking to sell a 51% stake in its digital decoder maker Beta Research to Deutsche Telekom for around 1 billion marks ($464 million).
The German cartel office has extended the review period, due to end at the end of the month, until July 25. The companies asked for the extension since Telekom's sale of its regional cable systems would remove a major obstacle to the Beta deal.
(Reuters contributed to this report.)
