Bloomberg News

F1 Owner Said to Seek More Than $2 Billion From IPO

April 10, 2012

Felipe Massa of Ferrari pulls in for a pitstop during the Malaysian F1 Grand Prix in Kuala Lumpur. Photographer: Paul Gilham/Getty Images

Felipe Massa of Ferrari pulls in for a pitstop during the Malaysian F1 Grand Prix in Kuala Lumpur. Photographer: Paul Gilham/Getty Images

CVC Capital Partners Ltd. may seek more than $2 billion from an initial public offering of the Formula One auto-racing series, according to four people with knowledge of the matter.

The private equity firm may sell a stake of about 20 percent in Formula One, one person said, asking not to be identified as the information is private. CVC wants to conduct the sale in Singapore as early as June, though its plans aren’t final, the people said.

Drawing on Formula One’s growing popularity in Asia, a Singapore listing would also be a boon for the city’s stock exchange, which is vying with Hong Kong’s bourse to attract companies from across the world. At $2 billion, the IPO would be Singapore’s fourth largest ever, and the biggest since Hutchison Port Holdings Trust (HPHT) raised $5.5 billion in March 2011, data compiled by Bloomberg show.

CVC, which already hired Goldman Sachs Group Inc. (GS:US) to advise it on the Formula One IPO, is expected to retain other investment banks to help manage the offering in the coming weeks, the people said. CVC’s London-based spokesman couldn’t be reached for comment outside of normal business hours.

The IPO may value the sport at more than $10 billion, a person with knowledge of the matter said last month. Formula One Chief Executive Officer Bernie Ecclestone has no plans to sell his 5.3 percent stake in the offering and will remain in his position under CVC’s plans, he said last month.

Manchester United

Singapore granted soccer team Manchester United Ltd. (MNU) permission to conduct an IPO of about $1 billion last year. That sale, which was scuttled by stock market volatility late last year, may be revived.

By listing in Singapore, where a Formula One race has been held since 2008, the auto-race and soccer club would both be drawing on their growing popularity in Asia. Formula One also holds Grand Prix races in China, Malaysia, Japan, Korea, India and Australia.

CVC, which owns 63.4 percent of Formula One, bought its stake in a leveraged buyout using $2.5 billion of loans. Other shareholders include the administrators of bankrupt Lehman Brothers Holdings Inc. who hold 15.3 percent and Ecclestone’s former wife Slavica who owns 8.5 percent through Bambino Holdings Ltd.

The series has annual sales of 1.17 billion euros ($1.54 billion) and employs 200 people, according to CVC’s website.

To contact the reporters on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net; Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editor responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net


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