F1 mega-transaction under investigation
European stock market authorities are investigating a large transaction that involves two of Formula 1’s most powerful decision-makers, including multi-billionaire Lawrence Stroll, father of Quebec driver Lance Stroll.
Stroll, a major shareholder of the manufacturer Aston Martin since last year, is a good friend of Toto Wolff, the boss of the Mercedes team. The two men are leading the way: their respective racing teams are among the richest in the great circus of F1.
According to information obtained by our Bureau of Investigation, BaFin, the gendarme of the German stock markets, looked in November 2020 into the purchase of Aston Martin shares by Toto Wolff. The reason for this review was possible suspicion of insider trading.
The case was subsequently transferred for review to the Financial Conduct Authority (FCA), UK, as Aston’s shares are listed on the London Stock Exchange.
The transaction that interests the authorities is as follows: Toto Wolff acquired in April 2020 a 0.95% stake in Aston Martin. The price paid for the shares is confidential, but considering Aston Martin’s market value, Wolff’s share is worth around $ 36 million.
Listen to the summary by Olivier Bourque, economic journalist for the Journal de Montréal, on QUB radio:
The catch is that barely six months after this transaction, it was announced that Mercedes intended to take an additional stake of up to 20% in Aston Martin. Also, the British manufacturer announced in May 2020 the appointment as CEO of Tobias Mœrs, who was until then boss of the AMG subsidiary of Mercedes.
These two announcements coincided with a significant jump in Aston Martin’s value.
Between April 17, 2020 and today, Aston’s stock has climbed over 60%.
Did Toto Wolff know, at the time of acquiring a stake, that the boss of AMG was about to join Aston? Did he know that Mercedes was planning a new investment in the firm?
« No », assured us Bradley Lord, head of communications for the Mercedes F1 team.
The latter told us that he was not aware of any ongoing audits.
“We are not aware of any such action. All the necessary disclosures were made to the British financial authorities at the appropriate time, ”he responded.
« Trusted partner »
Neither the German stock market authorities nor the British authorities wanted to comment on our information.
Aston Martin spokesperson Grace Barnie told us she had no comment from either Lawrence Stroll or his company on the matter.
Specialized media Motorsport reported in April 2020 that Wolff’s investment was made with the blessing of the board of directors of Daimler (Mercedes’ parent company) in Germany.
“It is a financial investment. As always, we do not comment on any internal proceedings that have been held, ”said Jörg Howe, spokesperson at Daimler.
« Mr. Wolff has been a trusted partner of Daimler AG through their joint ownership in the Mercedes Formula 1 team since 2013, ”he added.
Close to Stroll
Toto Wolff is very close to Lawrence Stroll. In late March 2020, Britain’s Daily Mail reported that the two had missed a crucial F1 meeting and would have returned from traveling together.
« Mr. Wolff and Mr. Stroll are friends and sometimes share travel arrangements to and from Grand Prix. This was the case in Melbourne in [mars] 2020, ”Bradley Lord told us.
“Toto invested in Aston Martin because he believes in the brand, the product and its growth potential,” he said.
Events under the microscope
Lawrence Stroll announces that he bought 16.7% of the manufacturer Aston Martin, then in difficulty.
The transaction is for an announced value of 182 million pounds ($ 312 million) with partners, including André Desmarais (opposite), of Power Corp. from Canada.
The terms of the January deal are renegotiated due to COVID-19. Stroll’s group buys 25% of Aston for 262 million pounds ($ 449 million).
The Stroll group sells part of its newly acquired shares to Toto Wolff at a confidential price. These shares correspond to 0.95% of the value of Aston Martin.
The transfer of shares is from a company related to Stroll based in the British Virgin Islands (a tax haven) to a company related to Wolff based in Guernsey (another tax haven).
Lawrence Stroll becomes executive chairman of the board of Aston Martin.
Aston Martin announces the appointment of Tobias Mœrs, former boss of the AMG subsidiary of Mercedes, at its head.
Aston Martin announces a deal with Mercedes under which Mercedes will increase its stake in Aston up to 20% in exchange for technology.
Aston Martin’s share value is over 60% higher than in April 2020, before the share transfer.
- 61 years old
- Executive Chairman and Shareholder of Aston Martin
- Father of driver Lance Stroll, who races with the Aston Martin team
- Made a fortune in fashion, notably marketing the brands Tommy Hilfiger and Michael Kors
- Owner of the Mont-Tremblant circuit, north of Montreal
- Acquired Force India in F1 in 2018
- Fortune estimated by Forbes at US $ 3.2 billion (CA $ 4.1 billion)
- Recently parted with a US $ 200 MILLION yacht and collector Ferraris
- 49 years
- Mercedes team boss
- Described by Forbes as one of the most powerful men in F1
- Investor in the Mercedes team in F1 since 2013 (he currently owns 33%)
- Former racing driver, especially in Formula Ford
- Fortune estimated at 700 million Swiss francs ($ 941 million) by Bilan magazine in 2020