SINGAPORE – The private equity firm CVC Capital confirmed Tuesday that it sold a 21% share in Formula One for 1.6 million dollars in cash to an investor group that includes asset manager BlackRock. This is before an initial public offering (IPO) of 3 million in Singapore.
The agreement involves a reference value of at least 7 million for the company’s racing cars, at a time when financial advisers are beginning to point to potential investors during the promotion process prior to placement.
“We’re hoping to work with our new partners in the coming years,” said Donald Mackenzie, managing partner of CVC, who regarded the transaction as great news for Formula One.
The agreement before the public sale of CVC reduces participation in Formula One, which was formerly pegged at 63.4%.
The three investors are BlackRock, Waddell & Reed, and Norges Bank Investment Management, the asset management unit of the central bank of Norway.
“This capital sum might be needed, and it gives the public offering a little more credibility considering that some investment houses add to the presale,” said Peter Elston, president of strategy and asset management in the Asian unit of Aberdeen Asset Management.
Finance Asia, who previously reported pre-agreement, had said before the announcement that the transaction value in Formula One is 9.1 million, including 7.2 million and 1.9 million in equity and debt.
Goldman Sachs, UBS, and Morgan Stanley are leading the IPO, which could be the biggest IPO in Singapore since Hutchison Port Holdings Trust, and the Hong Kong billionaire Li Ka-Shing, who raised $5.5 million in early 2011.
The IPO will be the long awaited debut on the stock exchange of the franchise, headed by tycoon Bernie Ecclestone, the outspoken 81-year British who was once a race driver. Formula One has a calendar of 20 races around the world with over 500 million viewers.
The F1 price shall be fixed before the end of June after the company and bankers meet with investors and fund managers to assess demands for the offer.