Manor takeover: CGF awaiting on due diligence report before pursuing bid.


Yesterday, this blog was informed, that the breaking point for any takeover deal that Mr Fitzpatrick would consider for the team was evidence that there were the funds in place from a bidder that would see the team through to the end of the 2017 season.  

We have been contacted by a credible source about the process and this source claims that CGF have met this requirement. They inform us that Proof of Funds were provided very early on in the negations or they would not have got this far and have insisted that hundreds of thousands of pounds to date have also been spent on lawyers and auditors fees.

The fund managers CGF of course have a responsibility towards their investors and we have been told the acquisition of Manor Racing has been taken very seriously.

In order to meet the obligations of their stakeholders, CGF have hired two well known top-tiered firms to do their due diligence on the takeover.  We are aware of the names and can confirm that they are the same firms which were involved in the previous sale to Stephen Fitzpatrick in 2015.  

The reason behind the lengthy due diligence we are told is down to one simple reason. Manor is the only F1 team on the grid that has been involved in two fatal accidents. The liability of this needs to be assessed very carefully by CGF. 

The Fund Managers are now seeking to get an impartial legal view on this. That is the main reason reason why CGF have not presented further documentation and evidence to the team at present and why the acquisition process hasn’t progressed.  CGF are under no obligation to present further evidence to the team and it is quite possible the team is not aware of the processes that have already taken place.

Being in administration has also made matters more complicated due to the processes that a potential buyer is now legally required to be followed. If a bid is made to the administrator and in this case Stephen Fitzpatrick as seller, and if the bid is accepted by all parties, the administrator needs to go to court with financial evidence that the 2017 obligations can be fulfilled. This process needs to start as soon as CGF legal team, from the investors, have the green light regarding the current investigation they are doing regarding liabilities. 

In spite of all the time pressures facing the team, these processes are mandatory and must be adhered too. No exceptions. One of the knock on effects of the financial crisis in 2008 was financial institutions creating layer-upon-layer of risk adverse and compliance structures. Nothing will be signed off by the Fund Managers until every base has been covered. Whilst everyone on the CGF side of the bid is well aware of the critical situation the team is regarding being able to compete in the first race at Melbourne, these processes are standard mandatory procedure for any sort of large investment that CGF and other financial institutes make.

They hope in the next few days that the independent due diligence will be complete and that they have will have a clearer picture of where they stand.

We have also been advised that there is no “spearhead figure” involved in the deal. The Fund Managers are working with a team of advisors (we can figure out at least who one of them is) and investment board are making the final investment decision on behalf of investors. Within the main main players at CGF, is a host of nationalities but the Asian influence is the predominant influence and culture.

We are sure there are many more ups-and-downs to come but the overriding message from today’s update is more uplifting than yesterdays news. The CGF bid hasn’t failed nor has it stalled. Moreover, we are being told that this bid is well within well the time frame of any normal acquisition, and is on target to be complete in less time than it took Fitzpatrick to buy the team.

We understand that our fellow fans are very anxious and aware time is precious but all is not lost.