Investors in pole position with £1bn F1 move ahead of IPO

PRIVATE equity firm CVC Capital Partners has sold a 21 per cent stake in Formula 1 to a group of investors for $1.6 billion (£1bn) in cash as the motor racing series gears up for a flotation next month.

CVC managing partner Donald Mackenzie said the investment – from US fund manager BlackRock, Norwegian sovereign wealth fund Norges Bank Investment Management and Waddell & Reed, the US asset management firm – was “great news” for Formula 1.

He added: “We look forward to working with our new partners over the coming years.”

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CVC, which had owned 63.4 per cent of the business, became the controlling shareholder of Formula 1 in 2006 and will remain the largest investor in the racing series following yesterday’s deal, Mackenzie said.

Peter Elston, head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management’s Asian division, said: “It raises some capital, which may be required, and it gives the IPO a little bit more credibility if some well-known investment houses come on board pre-IPO.”

Formula 1 is exploring a flotation on the stock market in Singapore next month.

The group is reportedly seeking to raise up to $3bn through the public offering, which would be Singapore’s biggest since Hong Kong billionaire Li Ka-Shing’s Hutchison Port Holdings Trust raised $5.5bn in early 2011. Formula 1 chief executive Bernie Ecclestone is expected to retain a minority stake in the business following the flotation, which is set to be priced before the end of June after the company and its bankers meet investors and fund managers to gauge demand for the offering.

Roger Tan, chief executive of SIAS Research, said: “I don’t think it’s going to be priced cheaply. There’s a brand premium to it.”