F1 » 26 May 2012
F1 to delay flotation following Facebook flop?
F1 owner CVC may hold back from its plans for an IPO in Singapore following the failure of Facebook's similar offering.
Both Bernie Ecclestone and new F1 chairman Peter Brabeck have hinted that excitement over the probable listing of the sport on Singapore's stock exchange may have to be tempered for a while, as other recently-launched IPO's fell flat.
Much has been made in the past few months of the likelihood of rights holder CVC Capital Partners making around twelve per cent of the sport available to speculators and investors, but the high-profile slump in Facebook shares following an equally over-hyped flotation last week has caused those involved in the F1 bid to take a second look at their timing. F1 had been given the go ahead to list in Singapore, with Ecclestone suggesting earlier this weekend that the flotation could take place as earlier as next month, but that may now be delayed.
"The market doesn't look too bright after that little bit of a problem with Facebook," a source close to deal told AFP, "I think they are going to wait and see."
Nestle CEO Brabeck, a minority stakeholder who has since been appointed as F1's new chairman, confirmed that there was no date set in stone for the move to market, which is to be led by two finance houses involved in the Facebook flotation, Morgan Stanley and Goldman Sachs, as well as Switzerland's UBS, along-time F1 partner.
"It was the first time that the board had a report on the preparation, there was pre-valuation of the whole process," he told Reuters of the meeting in Monaco which confirmed his new position, "I think we made a step forwards but no decision has been taken."
CVC last week sold a 21 per cent stake in the sport to two other US-based investors - Waddell & Reed and BlackRock - as well as Norway's Norges Bank Investment Management, but is still looking to reduce its holding further, from 42 per cent to around 30, via the Singapore flotation. The recent deal, however, has eased the desire to rush into an IPO.
"If anything, it has reduced the pressure or the need for an IPO or a next step and that's why the board looked at the IPO today as one option," managing partner Donald Mackenzie told Reuters, "It's certainly something we are going to look at over the next 3-6 months, but there is no set timetable."
Initial suggestions have valued F1 at $10bn, with the flotation separately valued at around $2.5bn. The offering is expected to net a profit for CVC, which bought a majority stake in the sport for a similar amount in 2006. Ecclestone owns a 5.3 per cent stake, while the estate of failed investment bank Lehman Brothers is also hoping to cash in on any IPO.
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