Much maneuvering around EM.TV

THE deal between Leo Kirch and EM.TV which was designed to rescue Thomas Haffa's ailing media company looks to have come unstuck and now various groups are circling the stricken company - which owns 50% of the Formula One group of companies - trying to decide what to do next. One of the groups tipped to bidding is Tele Munchen group, which is 45% owned by EM.TV. Morgan Grenfell Private Equity, a subsidiary of Deutsche Bank, is also in the bidding. The investment company stands to lose so much money if EM.TV goes out of business that it appears to be willing to invest more to gain control of the firm and rebuild it. There are also reports that Morgan Grenfell may take legal action against EM.TV which must be seen as an attempt to pressure Haffa into doing a deal with MGPE.

There is also talk of San Francisco investment house Hellman & Friedman becoming involved again. The company owned 37.5% of the business at the start of last year before selling it to EM.TV. Either the Americans believe that the company has solid potential in the long-term or they have plans for a quick sale of parts of the company.

Nothing is going to happen without Bernie Ecclestone having his say because the F1 boss holds a $1bn option to sell another 25% of the Formula One group to EM.TV. If Ecclestone insists on exercising that option EM.TV could go out of business and it also means that any buyer will have to be willing to invest an extra $1bn unless Ecclestone agrees to waive the option. He may do that but with a billion at stake Bernie is more likely to come up with a deal which suits him.

All the excitement has led to EM.TV's share price rising to 8.45 Euros ($7.20) but this seems to be speculative buying rather than the sign that there is a concrete deal in the making.

There is one thing of which we can be certain. Ecclestone is going to squeeze every dollar he possibly can out of the deal - as usual.

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