[Updated] F1 fans could soon be able to buy shares in their favourite sport. The floatation of the Formula 1 business is a step closer after the Singapore Stock Exchange approved the $3 billion flotation of part of the business, according to Reuters and Bloomberg today.
Pre-marketing is set to start on May 22nd, according to a Reuters source close to the deal. The marketing co-incides with F1 putting on one of its most spectacular shows of the season, at the Monaco Grand Prix this weekend.
CVC pre-sold $1.6 billion of stock to three investors including Black Rock in a deal which establishes the value of F1 at $7 billion. It cuts CVC’s stake to around 40% and gives the IPO some credibility if major investment houses have come in.
F1 bosses have met with investors and fund managers to assess interest in the floatation. Last week in Barcelona groups of interested parties were shown around the paddock and pit buildings by CVC’s Nick Clarry and by Fabiana Flossi, Bernie Ecclestone’s fiance. They even made a visit to the media centre, when it was in full swing.
CVC Capital Partners is looking to float part of its stake in the sale, along with other investors. They would however retain a controlling interest in the business. CVC and their partner Bernie Ecclestone, had hoped that the flotation would value the whole business at $10 billion, which would represent a six fold increase on their investment back in 2005. Ecclestone retains around 5% of the business. CVC boss Donald Mackenzie told a court in Germany, which is trying Gerhard Grobkowsky, a former banker involved in the sale of F1 to CVC, that their purchase was “very high risk” at the time because of the threat of a breakaway by manufacturers.
Today, with Ferrari, Red Bull and McLaren taking a seat on the F1 board, teams set to receive 47% of all commercial revenues going forward and the majority of teams (except Mercedes) signed up to race in F1 for eight years from 2013 onwards, the business is in a very different place.
Singapore’s stock exchange, known as SGX, is an ambitious exchange, vying with Hong Kong for high profile listings. Hong Kong had the Prada listing recently, while Manchester United are said to be considering Singapore. SGX president Magnus Bocker is no stranger to F1; he hosted the MotorSport Business Forum in September 2010 along with sports marketing agency JMI, which featured Ecclestone as one of the speakers.
The F1 floatation comes soon after the high profile flotation of Facebook, which raised $18 billion last week. And, co-incidentally, just as Facebook founder Mark Zuckerberg followed that up by marrying his girlfriend at the weekend, Ecclestone and Flossi are set to wed soon.
The Gribkowsky trial was interrupted in February due to the health of the defendant and has since gone quiet.
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