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Team announces formal sale process
Discussion started by Andrew Hooper , 29 May, 2020 08:32
Team announces formal sale process
Andrew Hooper 29 May, 2020 08:32
Well it looks like the situation at Williams has taken a major turn with the company announcing the start of a formal sale process.

Plus there have also been reports that RokIt is no longer a sponsor of the team.

Re: Team announces formal sale process
Albi-Quin 29 May, 2020 08:34
Andrew , Williams have served notice to rokit to terminate the contract.

Re: Team announces formal sale process
Albi-Quin 29 May, 2020 08:36
Williams Grand Prix Holdings PLC ("Williams", "WGPH", the "Company" or the "Group") 2019 Annual Results, Commencement of Strategic Review and Formal Sale Process
Results Press Release
Williams Grand Prix Holdings PLC (WGPH, Ticker: WGF1) today announces the Group’s financial results for the year ended 31 December 2019.
Group revenue declined to £160.2m in 2019, from £176.5m in 2018 and EBITDA deteriorated to a loss of £(13.0)m, compared to a profit of £12.9m in the previous year. The results were driven by the Formula 1 operation’s poor on-track performance, despite continued progress at Williams Advanced Engineering.
Formula 1 revenue declined to £95.4m in 2019, from £130.7m in 2018 and EBITDA was £(10.1)m last year, compared to £16.0m the previous year. Williams Advanced Engineering revenue increased to £63.7m in 2019, from £44.8m in 2018, with EBITDA up to £7.5m in 2019 from £5.1m in 2018.
“The financial results for 2019 reflect the recent decline in competitiveness of the F1 operation and the consequent reduction in commercial rights income” said Mike O’Driscoll, Chief Executive Officer. “After four years of very solid performance in the FIA F1 Constructors’ Championship during which we claimed two third and two fifth place finishes, we endured a couple of very difficult seasons. We have implemented a significant restructuring over the last nine months and have strengthened the technical leadership team.”
“The 2020 Formula 1 season has, of course, been disrupted due to the COVID-19 pandemic, and this will have an impact on our commercial rights income this year. The Team have also served notice to terminate its relationship with its title partner, ROKiT, and major sponsor, ROK Drinks. In common with many other businesses, we have taken extensive action to mitigate, including a prolonged furlough period for much of our staff. As this awful global crisis recedes, everyone at Williams Racing is looking forward to the start of the new season.”
“There has been an enormous gap in earnings and expenditure between the three largest teams and the rest of the grid for a number of years, but we are confident that Liberty Media’s long-term vision and plans, including a first-ever cost-cap for the sport, will deliver a more level playing field for 2021 and beyond, on which all teams can compete more fairly.”
“Williams Advanced Engineering growth continued in 2019, and we decided to bring external investment into the Group, through the sale of a majority stake, on 31 December 2019. This will enable WAE to continue to deliver the innovative solutions for which it is known and respected. Whilst we are no longer a

majority shareholder in WAE we hold a significant minority stake in the business and remain a key partner for them through the provision of technical and support services.”
Revenue (£m)
EBITDA (£m)2
Operating free cash flow (£m)3
Revenue (£m)
EBITDA (£m)2
Operating free cash flow (£m)3
New Strategic Direction
95.4 63.7 1.1 (10.1) 7.5 (10.4)
130.7 44.8 1.0 16.0 5.1 (8.2)
160.2 (13.0) (15.9)
176.5 12.9 6.3
The 2018 and 2019 seasons proved very challenging for Williams with disappointing performances in the FIA F1 Constructors’ Championship, after a number of years of much stronger performance. As a result, revenue has been under pressure, due to lower commercial income resulting from the Team’s on-track performance, as well as a decline in sponsorship.
Success in Formula 1 over the last decade has been very heavily weighted in favour of corporately-backed teams with comparatively large annual budgets. The new commercial rights holder, Liberty Media, is introducing new financial regulations from next year which, significantly, will include a cost cap for the first time. In addition commercial income from the sport is expected to be distributed more equitably than at present. The WGPH board believes these changes will address the greatest inequity in the sport and will allow all teams to compete on a more even basis. Formula 1 and the Sport’s governing body, the FIA, are also introducing new technical regulations for the 2022 season with the objective of ensuring much more competitive and exciting racing in the future. To that end, and in light of these challenges, WGPH has embarked upon a renewal programme setting out a new strategic direction, to ensure it is well positioned to take advantage of Formula 1’s new era which will begin in 2021.
• As a first stage in this process, WGPH divested a majority stake in Williams Advanced Engineering in December 2019, providing renewed focus in the F1 operations
• WGPH has implemented significant operational improvements and the technical organisation has been comprehensively reorganised with new leadership and talented designers joining the team
• WGPH has secured a long-term contract renewal for the supply of the best-in-class Mercedes HPP- AMG power unit
1 Williams Heritage, Williams Conference Centre, Group costs, and other projects delivered outside of F1 and Williams Advanced Engineering.
2 EBITDA represents earnings before interest, taxes, depreciation and amortisation and excludes non-cash share-based payment charges and mark-to-market charges on financial derivatives and the exceptional profit booked on disposal of Williams Advanced Engineering.
3Operating free cash flow represents cash flows from operating activities including capital expenditure and disposals of fixed assets.

• Additional financing has been secured from third party lenders, providing WGPH with the resources to deliver upon its new strategic plan
Strategic Review and Formal Sale Process
As part of this new strategic direction, the WGPH board is undertaking a review of all the various strategic options available to the Company. Options being considered include, but are not limited to, raising new capital for the business, a divestment of a minority stake in WGPH, or a divestment of a majority stake in WGPH including a potential sale of the whole Company. Whilst no decisions have been made regarding the optimal outcome yet, to facilitate discussions with interested parties, the Company announces the commencement of a "formal sale process" (as referred to in Note 2 on Rule 2.6 of the Takeover Code).
The Board has appointed Allen & Co. and Lazard as joint financial advisers to assist with the strategic review and formal sale process. Parties with a potential interest in Williams should contact Allen & Co. or Lazard at the contact details set out below.
Any interested party participating in the formal sale process will be required to enter into a non-disclosure agreement with WGPH on terms satisfactory to the WGPH board. The Company then intends to provide such interested parties with certain information on the business, following which interested parties will be invited to submit their proposals.
The Panel on Takeovers and Mergers has agreed that any discussions with third parties may be conducted within the context of a formal sale process. Accordingly it has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any party participating in the formal sale process will not be required to be publicly identified under Rules 2.4(a) or (b) and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Takeover Code for so long as it is participating in the formal sale process.
The Company is not in receipt of any approaches at the time of this announcement and confirms that it is in preliminary discussions with a small number of parties regarding a potential investment in the Company. There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made. The WGPH board reserves the right to alter or terminate the process at any time and if it does so it will make an announcement as appropriate. The WGPH board also reserves the right to reject any approach or terminate discussions with any interested party at any time.
Following this announcement, the Company is now considered to be in an “offer period” as defined in the Takeover Code, and the dealing disclosure requirements summarised below will apply. Further announcements regarding timings and procedures for the formal sale process will be made as appropriate.
While the Company has faced a number of challenges, Williams currently remains funded and ready to resume racing when the calendar allows in 2020. The WGPH board believes that the strategic review and formal sale process is the right and prudent thing to do in order to take time to consider a full range of options and put the Formula 1 team in the best possible position for the future.
For further information please contact the following:
Williams Grand Prix Holdings PLC
Tim Hunt
Allen & Company LLC (Joint Financial Adviser)
Paul Gould
Georg Schloendorff
Tel: +44 1235 777 842 Tel: +1 (212) 339 2383

Re: Team announces formal sale process
SydneyF1Fan 29 May, 2020 09:05
Looks ugly, but not surprising. I hope they secure a sustainable outcome.

I suspect this will be the first of several teams making similar announcements. I'm sure all of the independents are finding it tough and even the manufacturers will be severely tightening their belts.

Meanwhile, in Australia the footy (rugby league) has resumed, so life has returned to normal!!

Re: Team announces formal sale process
Andrew Hooper 29 May, 2020 09:22
They have started just hope nothing pops up to see them stop.

I am trying to be positive about the Williams announcement as there is a way to go in this process and it can go a variety of ways.

Re: Team announces formal sale process
SehnKhan 29 May, 2020 09:32
Curious to see why it was from Williams side that the RoKIT sponsorship was terminated. Perhaps a bigger (conflicting) sponsor entered the frame (with potential opwnership in mind).
Or perhaps a competitor (other than Rich Energy) emerged... Monster Energy Williams.

Edited 1 time(s). Last edit at 29/05/2020 09:34 by SehnKhan.

Re: Team announces formal sale process
Myvatn 29 May, 2020 09:44
I think the easiest explanation is always the most likely and Rokit just didn't pay (they are a startup and not getting any coverage).

Unless Latifi really wants to pour a lot of money it looks like the end for the team...

Re: Team announces formal sale process
ihme 29 May, 2020 10:26
Damn, I had a feeling the second the covid crisis started that we could be affected the worst and here it is


Re: Team announces formal sale process
Andrew Hooper 29 May, 2020 11:27
Yes it was the case that ROKiT failed to pay simple as that.

Re: Team announces formal sale process
Ozzy Osbone 29 May, 2020 12:10

Edited 1 time(s). Last edit at 29/05/2020 12:12 by Ozzy Osbone.

Re: Team announces formal sale process
dot_com 29 May, 2020 13:43
Wow. This is shocking and yet still somehow not surprising. My only hope is that this is some sort of legal ploy to allow them to exit their Rokit contract without paying through the nose. If the team returns to their classic blue livery and has a great car this year, perhaps they will somehow be saved. I’m clutching at straws here, as this is obviously very serious news and I cannot comprehend F1 without Williams. I’ve been a fan since the 90’s and they are a huge part of why I watch F1. Really hope the team has something up it’s sleeve.

Re: Team announces formal sale process
Mehryar 29 May, 2020 13:45
Looking at Lawrence's career and how successful he was wherever he put his hands on, the investment he's making on the team, the gamble he's taken on Aston Martin and so and so and so...I feel envious why the team has let the chance slip off if there was any offer by the Strolls.

Between all the names out there as potential buyers/investors, none of them looks as reliable as Lawrence.

Re: Team announces formal sale process
monty3 29 May, 2020 14:04
who will buy this team should retain the Williams name, if not, they are nowhere!!!

Williams = History

Re: Team announces formal sale process
ihme 29 May, 2020 14:28
Williams = History

It might as well be.

Re: Team announces formal sale process
Mehryar 29 May, 2020 14:56
It's highly unlikely that a new buyer will change the brand name even if there's a new "buyer" and not a partial investor.

Usually the new owner of a brand changes the name if the legacy of its former name is negative or simply not big enough.Like what it happened with Jordan/Spyker/Force India/Minardi or even Tyrell.

If the name is big enough and connected with cores of that industry it's more likely to be run under the same name to use its past glory as a better marketing arm.Like what it happened with Mclaren, Lotus and even Brabham for its first few years.

Tbh, if the original family is not strong enough to run the team and squeeze it into possible collapse, I would prefer a new investor without any connection with the original family to step in and revive it with a minor stake for the family.

Re: Team announces formal sale process
Damon96 29 May, 2020 17:02
Does seem Rokit has really impacted the team, the losses they’ve made are pretty much the unpaid sponsorship and I guess with that lost for the next 3 seasons, the team is now untenable as it is having suffered so much in the last two seasons.

Only hopes I could see is Toto doing a Brawn and buying the team or some one like the owner of Ineos comes in and ditches the Merc deal.

Re: Team announces formal sale process
Ozzy Osbone 29 May, 2020 17:58
To be honest guys, these noises have to be made to show the good intentions of the board. I don't think right at the moment there is a desire to sell a majority stake. We have a much cheaper F1 coming up in just over 18 months and a far more level playing field. This is the time to be getting in, not getting out.

What directors cannot be seen to do is push a company over the edge so this shows willing. They have reserved the right to reject any offers.

Personally I believe this is a little house keeping to make sure no one gets on the hook should the worst happen. I have been the director of multiple companies over the years and I know how this works. They cannot be seen to be simply blindly pushing on to oblivion.

That's what I hope anyway.

Re: Team announces formal sale process
Damon96 29 May, 2020 18:21
Does raise some questions about F1 future, McLaren struggling, rumours of Merc quitting, Renault have announced 15,000 redundancies so they'll be under pressure to quit F1.

With the push for electric and FE on the rise, can't see any manufacturer rejoining F1 and sponsorship / advertising budgets will take a massive hit over the next two years.

Re: Team announces formal sale process
j-s 29 May, 2020 18:30
Well, seems Williams have been painting themselves into a corner for the past couple of years.

They've clung to the privateer status to their own detriment perhaps, even if that fierce independence is what makes the team lovable. The team is almost an anachronism at this point.

Let's see what the ownership structure morphs into. Whoever is interested in a stake is obviously betting on the new revenue distribution and cost caps. And anyone who plonks enough cash to buy a majority stake would logically overhaul the management. Which is what should happen anyways, regardless of who owns shares.

Williams has brand equity, pedigree, some decent facilities and, most importantly, a seat at the F1 table. Williams will tell the world how much F1 is actually worth. Should be fun reading.

So... what's next. Sadly, I have little sympathy left for Williams. I enjoy the brand and identity of the team But I have become indifferent about who's actually running the show (Clarie, MOD, etc.) and honestly don't care if Williams Family takes a back seat if that gives us two decent cars.

Re: Team announces formal sale process
j-s 29 May, 2020 18:38
Also, the ROKit thing is definitely weird. It has to be connected.

What a weird effing sponsor, ROKit.

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