Today a little piece of F1 history was made as the Williams F1 team floated on the Frankfurt Stock Exchange. The listing, of 2.4 million shares, was fully subscribed at €25 per share, which means that €60 million has been raised, principally for engineering guru Patrick Head, whose stake in the team has reduced to just 5%.
This values the team at €250 million.
The shares started trading on the Frankfurt Borse this morning and were slightly down after the first hour of trading, according to Reuters. Williams chairman Adam Parr was there to see it. He said, “This listing demonstrates investor confidence in both Williams’ future as an independent constructor and its ability to unlock the value of its brand and intellectual property. Williams has solid growth potential which underpins its investment proposition; we will now focus on realising that potential for the benefit of shareholders while continuing our progress back to the front of the Formula one grid.”
F1 CEO Bernie Ecclestone welcomed Williams’ move into the city with comments yesterday on F1.com, “I think it’s good. Others should also think about it, as I believe that there are enough interested buyers out there. Formula One is by far the best global platform to market a brand.”
The willingness of investors to buy a stake in an F1 team shows that there is belief in the markets that F1 costs are under control and that it can be possible for a team to be profitable. It also shows investor confidence that the negotiations over the new 2013 Concorde Agreement will not lead to the sport imploding, as it almost did in the summer of 2009 over budget caps. But there are still inherent risks in an investment of this kind.
Williams’ business model relies on them competing in the top five or six in the Constructors’ Championship, which they look like they might manage this year, although having a rookie (Pastor Maldonado) in one of the cars obviously carries a risk in terms of overall points scoring. Against that is the investment from Maldonado’s backers, Venezuelan oil giant PDVSA, believed to be for five years.
There have been suggestions for some time that FIAT is thinking of floating part of Ferrari, these rumours intensified when Abu Dhabi investment vehicle Mubadala was asked to sell back its shares in the company.
You can track the performance of Williams’ shares by clicking on this link Williams Share Tracker