Reports today suggest that Formula One has taken a step closer to its planned flotation in June with the acquisition of $1.6 billion by three investors. Blackrock, Waddell & Reed and Norges Bank are rumored to have taken a large stake in Formula 1 in the lead up to the IPO on the Singapore stock market.
The acquisition places the value of the series at approximately $9 billion and the series is seeking to raise nearly $2.5-3 billion with the IPO in June. Facebook recently raised $16 billion in its IPO last week. The enterprise value is arrived at by including $7.2 billion of equity and $1.9 billion of debt.
Current majority stakeholders, CVC Capital, are said to have gone from a 63% ownership position to 40% with the latest deal. In hindsight, it makes the BayernLB deal seem very under-valued doesn’t it?
While well-intention press and pundits ponder the notion of equity across the board for all players and stakeholders in the F1 future, the reality is, this isn’t going to happen. At the core of the issue is serious amounts of cash. When I say serious, I do mean serious. No team, sponsor, commercial rights holder or regulatory body are going to ignore the fact that the money is there and how much of the money they get for their part in the circus is up for grabs or at least negotiation.
This isn’t a communal series or utopia built on equality for each player, it is survival of the fittest and I’ve little doubt that Bernie Ecclestone is crafting some very serious inroads in this deal. He is beyond the money. He has plenty. As he has stated before, it is all about doing the deal and getting the best leverage and position. That is what moves him but don’t be fooled into thinking that it doens’t move the teams or the FIA either.
F1 could look radically different in the next 60 days but whatever happens, it will counting on your participation, support and hard-earned dollar.