Owner CVC looks set to proceed with the floatation of F1 later this year, according to Formula One business journalist Christian Sylt.
Late last year, Sylt said CVC had decided to continue to delay the planned Singapore floatation until at least 2014.
But in a new report for the Telegraph, he quotes a ‘senior source’ as saying CVC is now eyeing October, when it hopes the European financial crisis and the Gribkowsky corruption affair in Germany will be resolved.
“In October this year, we ought to be able to look at the following year and say that most of next year’s earnings are under contract, the market is in a very good place and Germany is now clear,” said the source.
A company has filed a $650 million lawsuit against Formula One.
Bluewaters Communications Holdings claims it was the high bidder to buy the sport in 2005. It is claimed CVC, F1’s current owner, was the lower but successful bidder because of F1 chief executive Ecclestone’s alleged bribes to the now-jailed former banker Gerhard Gribkowsky.
Gribkowsky, CVC and the German bank BayernLB were all named as defendants in the New York suit, the Financial Times, Bloomberg and cityam.com report.
Bluewaters claims it offered in writing to pay 10 per cent more than all other bidders, but gave “no commitment” to keep Ecclestone in the top job.
But when asked on Monday why the bid failed, Ecclestone said: “No idea. They probably didn’t give enough money.”
One of F1’s new owners has bought even more of the sport, it has emerged. Amid expectations last month that the Singapore floatation was going ahead, the US based asset managers Waddell and Reed, and others, bought a $1.6 billion stake in the Formula One business from existing owners CVC.
Reuters and Sky News are now reporting that Waddell and Reed has lifted its new stake by $500 billion, to almost 21 per cent. CVC, having cut its stake from 63 per cent to 42 per cent, confirmed the news.
The news follows F1’s plans to delay its stock market floatation due to market turmoil.
Formula One is worth about $8 or $9 billion, as the sport’s owner CVC confirmed it has this week sold a 21 per cent stake to new investors.
News of the sale coincided with the launch of pre-marketing ahead of one of the biggest ever sports floatations, data by the financial experts Thomson Reuters shows.
“It’s cheap compared to Facebook,” chief executive Bernie Ecclestone told reporters on Tuesday, confirming that the Singapore IPO looks set to go ahead soon “with no dramas”. “All the things that have to happen have happened. It will be finished by the end of June,” the 81-year-old is quoted by the Telegraph.
F1’s new one-fifth owners are US managers Waddell and Reed, the powerful Blackrock and Norway’s central bank Norges.
“It’s a great way to start the IPO and lets investors know what they can expect,” said Ecclestone.
The diminutive Briton said he is keeping his 5.3 per cent stake, and staying in charge. His former wife Slavica controls another 8.5pc, the news agency Bloomberg said.
“You might as well have asked Frank Sinatra who he would appoint to replace him,” Ecclestone insisted.
CVC said in a statement that is remains F1’s biggest and controlling shareholder.
Even ahead of F1’s Singapore floatation, the sport has some new owners.
Reuters, the specialist financial market news agency, said US-based asset managers Waddell and Reed, Blackrock and Norway’s Norges Bank have bought a $1.6 billion stake from existing owners CVC. The report cited a source “with direct knowledge of the matter”. The companies did not immediately comment.
It drops CVC’s stake from 63.4 per cent to about 40pc, the source said.
We reported on Monday that the Singapore stock exchange approved F1’s plan to raise as much as $3 billion in an initial public offering. Other reports said pre-marketing for the listing, likely to go ahead at the end of June, will begin immediately.
“It is not our practice to publicly comment on our dealings with listing aspirants,” said a Singapore bourse spokesman.
Some insiders have expressed concern.
“Look at the muted first-day response to Facebook’s IPO,” an unnamed banker told the Singapore broadsheet Straits Times. “The F1 listing is not nearly as attractive and long-awaited as that.”
Following the bankruptcy of the Lehman brothers, private equity group CVC are expected to buy their 16.8 percent stake in Formula One from the administrators. The investment bank had owned a 16.8 percent stake in Delta Topco, making them the second biggest shareholder after CVC.
“In reality, we are the only buyer,â€ CVC s UK managing director Nick Clarry explained to the Telegraph newspaper. “We have made an offer to buy Lehman s shares in the past and may do so again.â€ Clarry also revealed that CVC have first refusal on Lehman s shares anyway as the group have control and Lehman would not be able to sell the shares on without first offering CVC the shares, and if they didn t want to buy them, CVC s approval would still be needed for any share transfers.
Formula One’s commercial rights holder CVC Capital Partners has dismissed speculation, triggered by comments from FIA president Max Mosley, that it is about to sell the sport and replace Bernie Ecclestone.
Rumours have been doing the rounds for several weeks now that the investment company, which owns around 70% of the Formula One Group, is looking to sell-off its shareholding of the sport.
Max Mosley fuelled the speculation further this week when he told journalists in Monaco that CVC could sell-up if they received an offer from a “sovereign wealth fund”. Mosley also contemplated the ramifications of such a move on the future of Bernie Ecclestone, chief executive of the Formula One Group.
“They [CVC Capital Partners] tell me that they are in no hurry,” disclosed Mosley. “They haven’t got any plan to sell, and last time I spoke to them I said, what if a sovereign wealth fund came along with a huge amount of money? They said they would be tempted but they say they don’t have any plans to sell it.”
“They want to stabilise it. And I don’t know this, but I suspect, that part of it will be where Bernie has been replaced. If someone wanted to buy it at the moment then the whole business depends on a man who is 78 years ago…”
The speculation has prompted CVC to issue a statement rebuffing the rumours that they are about to relinquish control of the Formula One Group.
“Following recent press speculation CVC is pleased to clarify a number of matters,” said the private equity company. “We have no plans to sell our stake in Formula 1. We see our investment as long term and we are pleased with its performance to date.”
And in response to claims that they were about to replace Bernie Ecclestone CVC added: “The Formula One Group continues to be led by Bernie Ecclestone, there are no plans to replace him and we are delighted with the results of the business under his management.
“The Formula One Group has an agreement in place for 2008 – 2012 which governs the division of income generated by the sport, by way of prize fund.”
F1 teams have agreed to setup a new body that will work in conjunction with the FIA and Formula One Management to thrash out a new Concorde Agreement including the commercial conditions and new rules. The new body has representatives from each Formula One team.
The body met up with Bernie Ecclestone and CVC s managing partner Donald McKenzie at Ferrari s HQ in Maranello, Italy, yesterday to discuss the future of F1 and Ferrari revealed that the talks had been very useful.
“All the Formula One teams met today in Maranello and held an extremely constructive meeting, in the presence of Bernie Ecclestone and Donald McKenzie,” Ferrari said in a statement.
“The teams have subsequently agreed unanimously that they will establish the new Formula One Teams Association to work with the FIA and FOM to agree upon regulations and commercial conditions which will provide a framework for a strong and dynamic sport.”