24 May 2012
New F1 chairman to receive significant stake?
Peter Brabeck, the man tabbed to head up F1's new era, is in line for a potential multi-million dollar stake in the sport.
The man poised to take up the reins as non-executive chairman of F1 could be rewarded with several million dollars of equity, it has been claimed.
According to Sky News, Peter Brabeck could receive a 0.5 per cent stake in the business which, with its current valuation, could amount to as much as $50m, should he be confirmed as the new head of the sport in Monaco this weekend. The 67-year old Nestle chairman will be granted the stake in return for an initial investment
- rumoured to be a 'single digit million dollar sum' - as F1 prepares for a IPO listing on the stock market in Singapore in the next few weeks. Brabeck's equity is expected to carry a lengthy lock-in period, preventing him from cashing in immediately, and will almost certainly be tied to the performance of the company.
With Ferrari chairman Luca di Montezemolo and current F1 chief executive Bernie Ecclestone also expected to receive equity shares - the latter of significantly greater proportion than Brabeck's - rights holder CVC Capital Partners will be left with a 42 per cent stake worth about $4bn, a figure already diluted by the news that the investment company had sold 21 per cent of the F1 company to three new investors - Waddell & Reed and BlackRock from the USA and Norway's Norges Bank Investment Management - for $1.6bn.
Brabeck's value to CVC is expected to come not only from a good relationship with Ecclestone, but also his position at Nestle, which is thought to come as a vital piece in the bid to attract high-calibre investors to the sport. Indeed, not only does Brabeck hold the CEO position at Nestle, but also sits on the board at L'Oreal, Credit Suisse and Exxon Mobil. An F1 enthusiast, he has also been a director of F1 commercial rights holder Delta Topco, since CVC first invested in the sport.
While Wednesday's sale announcement is expected to recoup much of the $1.7bn CVC spent buying F1 in 2006, and the company will look to off-load a further eleven per cent of its holding in the IPO, which Ecclestone expects to happen in Singapore by the end of next month.
"I look at the float as a change of shareholders," Ecclestone told Britain's Telegraph newspaper, "We've got some shareholders at the moment, so now they are going to sell some of their shares and we are going to have some other shareholders. I don't imagine the shareholders will be running the company, so there's no real change. It's not going to bring any investment to the company as it doesn't need it. All the things that have to happen have happened. It will be finished by the end of June."
Although CVC has yet to officially confirm or deny the stories, this weekend's meeting of the Delta Topco board in Monaco is also expected to confirm Unilever's Jean-Marc Huet, CapitaLand president Liew Mun Leong and , president and chief executive of CapitaLand, and Temasek Holdings deputy chairman Kwa Chong Seng as independent directors. Ecclestone, meanwhile, has confirmed that he will not reduce his 5.3 per cent stake and does not expect to see anyone lined up to replace him as chief executive.
"I wouldn't appoint somebody to do my job because nobody would run the business the way I do," the 81-year old insisted, "You might as well have asked Frank Sinatra who he would appoint to replace him. Somebody can sing but can they sing like Sinatra? No. Will somebody run the business the way I run it? No. They might run it better, but they wouldn't run it the same."
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