CVC said to tap Goldman on IPO
UK private equity firm may exit motor-racing business via listing in Singapore
KUALA LUMPUR: CVC Capital Partners hired Goldman Sachs Group Inc to explore a possible sale of a stake in Formula One in an initial public offering (IPO), said a person with knowledge of the matter.
Any deal to sell part of CVC’S holding might value the motor-racing series at more than Us$10bil and Singapore was a possible listing venue, the person said, declining to be identified as the deliberations are private.
An IPO by Formula One would be a boost to Singapore, which is vying with Hong Kong to attract companies from across the world seeking to capitalise on Asia’s growing economies. Manchester United Ltd, the record 19-time English soccer champion, might revive a Singapore IPO, people familiar with the matter said this month.
“A listing like this enhances brand Singapore,” said Christopher Wong, a Singapore-based senior investment manager at Aberdeen Asset Management Asia Ltd, which manages more than Us$87bil in assets in the region. “Listing it in Singapore appeals to the growing popularity of the sport in this part of the world, which is driving the growth of F1.”
Sky News reported on Monday that CVC hired Goldman Sachs to study a placement of part of its stake in Formula One. Spokespeople for CVC and Goldman Sachs declined to comment on the possible IPO.
Listing it in Singapore appeals to the growing popularity of the sport in this part of the world, which is driving the growth of F1. — CHRISTOPHER WONG
CVC bought majorityty control of Formula One in March 2006, according to the private equity firm’s website. F1 has annual sales of 1.17 billion euros (Us$1.55bil) and employs 200 people, the website shows.
Formula One added India to its racing circuit last year and also holds Grand Prix races in China, Malaysia, Japan, South Korea, Singapore and Australia. Chief executive officer Bernie Ecclestone said the private equity firm would be better off exiting the business via an IPO rather than selling it, the Sunday Telegraph reported in November.
Ecclestone said the race should seek a listing in Singapore because of Asia’s interest in the sport, the newspaper reported.
The buyout firm and teams are negotiating terms of a new commercial agreement, as the existing accord expires after this year. The 2012 season began last week with the Australian Grand Prix in Melbourne, and a further 19 races are scheduled.
Formula One might be drawn to a Singapore listing because of the citystate’s efforts to cultivate itself as a destination for wealthy individuals, ssaid Aberdeen’s Wong.
“Singapore has created this whole eecosystem around private banking, wealth management, the integrated resorts, arts and culture for the rich aand famous,” he said.
Singapore began staging a Formula Oone race in 2008. The government supported the Formula One bid as part of a goal to boost tourism, saying in 2007 that it would fund about 60% of the event’s cost.
The race contract ends this year and Singapore hired consultants to assess its impact on the city-state’s economy, the Straits Times reported in September.
Singapore’s exchange is vying with Hong Kong for international brand-name listings as Europe’s credit crisis deters companies from going public there. Hong Kong hosted IPOS by Prada SPA and Samsonite International SA last year.
Manchester United received the Singapore stock exchange’s approval in September to raise about Us$1bil in an IPO, people with knowledge of the matter said at the time. The process then stalled as volatile stock markets made equity sales more difficult to pull off, bankers said. – Bloomberg