Investor backs out of Arrows
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Your support makes all the difference.The future of the struggling Formula One motor racing team Arrows has been thrown into doubt this weekend as it emerges that its majority shareholder is hoping to sell up.
Morgan Grenfell Private Equity, the investment arm of Deutsche Bank which owns 50 per cent of the team, has told the motor racing community that it wants out. The news, on the day of the Canadian Grand Prix, will be a blow to Tom Walkinshaw's team, which is struggling to compete against its better-funded rivals.
Morgan Grenfell invested in Arrows in January 1999 but has seen little improvement in Arrows' fortunes. It is now keen to exit, though it has not yet started any detailed discussions with potential buyers.
In December 1999 it came close to selling its stake to a consortium lead by Rupert Manwaring, the former director of Honda's motor racing division. But a deal never materialised. At the time it is understood Mr Walkinshaw estimated that Arrows was worth £100m.
Today, analysts believe the business is worth tens of millions more because of Arrows' sponsorship deal with mobile phone firm Orange and the increased popularity of the sport. Arrows' other asset is its number one driver, Jos Verstappen, who is highly regarded.
The team was set up in 1978, but has yet to win a race. Mr Walkinshaw bought Arrows in 1996 and has improved its performance, but the team still lags most of its rivals in the Formula One Paddock. This season, for example, the team has scored just one world championship point; Ferrari, the leading constructor, has 76 points.
A Formula One insider said that as well as Arrows, there are at least three other teams potentially up for sale.
Formula One, controlled by Bernie Ecclestone, is widely thought to have reached the peak of its popularity. Sponsorship deals are hitting new records Vodafone's deal with Ferrari is rumoured to be worth £100m and the number of television viewers is at an all- time high.
Despite this, there is a growing divide between the "haves" and the "have nots" in the industry. Ferrari and McLaren Mercedes are the strongest teams, with Williams rapidly improving its performance. But lower down the field, teams such as Arrows are struggling to keep up.
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