Investors take $1.6bn stake in F1 as IPO looms
PRIVATE equity house CVC Capital has moved closer to its hotly anticipated flotation of Formula One by selling a $1.6bn (£1.01bn) stake to three major investors.
CVC, which owned 63.4 per cent of F1, has sold 21 per cent of the business, it said yesterday.
Asset managers BlackRock and Waddell & Reed alongside Norges Bank Investment Management, the asset management unit of the Norwegian central bank, took stakes in a major fillip for Bernie Ecclestone, the F1 commercial rights holder, before a planned initial public offering (IPO).
The deal gives Formula One an enterprise value of about $9.1bn including $7.2bn of equity and $1.9bn of debt.
“This is great news for Formula One and an important step in its development,” said Donald Mackenzie, managing partner of CVC, which invested in 2006 and will remain the controlling shareholder.
“We have supported the company and its management as they have grown the company with great success. The addition of these three highly regarded investors to our share register is validation of this success.”
F1 begins pre-marketing the IPO this week after months of speculation. It is pressing on with the sale after being encouraged by the demand for shares in the run-up to Facebook’s IPO, which raised $16bn. The sport is seeking to raise at least $2.5bn in a Singapore listing, which could ultimately value F1 at up to $10bn.
Goldman Sachs, UBS, and Morgan Stanley are lead-managing the IPO, which could be Singapore’s largest since Hong Kong billionaire Li Ka-Shing’s Hutchison Port Holdings Trust raised $5.5bn in early 2011.
Several recent developments have highlighted the risks – from politics to safety – attached to Formula One.
Earlier this month Williams was forced to cut short its celebrations after the Spanish grand prix, its first race victory in eight years, when 31 people were injured in a fire in the team’s garage. In April the visit of F1 to the Middle East for the Bahrain Grand Prix was disrupted by civil unrest.