How much is F1 worth?
Formula 1 has been valued at the eye-watering sum of £5.7bn following the sale of a 21% stake in the sport to three investment companies.
Last Updated: 23/05/12 10:03am
F1 has been valued at the eye-watering sum of £5.7bn following the sale of a 21% stake in the sport.
The sale was announced by F1's majority shareholders, CVC Capital Partners, with three investment companies purchasing the stake for a fee of $1.6bn ahead of the sport's Initial Public Offering on the Singapore Stock Exchange next month.
'The deals by Waddell & Reed, BlackRock and Norges Bank Investment Management, which each invested separately earlier this year, put the total price of the company at $7.2bn, or $9.1bn including debt,' reported The Financial Times.
'The sale of stakes to institutional investors is partly aimed at helping those interested in buying F1 shares become more comfortable with the planned valuation of the group.'
F1's commerical supremo Bernie Ecclestone welcomed the new investors, telling The Daily Telegraph: "It is super to have them on board," while adding that it "shows how seriously Formula 1 is treated in the financial world. These people joining is a sort of stamp of good housekeeping. It's a great way to start the IPO and lets investors know what they can expect."
Yet one prospective fly in the ointment ahead of the launch remains Mercedes' ongoing commitment to the sport.
According to The Times, 'Ferrari, Red Bull and McLaren have been promised seats on a new board controlling the F1 business and have settled for a bigger slice of the profits. But executives at Mercedes, one of the sport's marquee names, are furious that they have been denied a seat in the carve-up of the sport's future, despite investing more than £1 billion over almost two decades.'
In the words of The Guardian, F1's valuation would 'change substantially' if, as his been speculated, the manufacturers were to withdraw from the sport - a point not lost on Nick Fry, Mercedes' F1 Chief Executive Officer, when he addressed the press corps in Barcelona earlier this month.
"If CVC wish to float F1, I think they need this resolved fairly quickly - possibly more than we need it resolved. Discussions continue but progress is not as strong as I would like," said Fry. "F1 definitely would be much the poorer if Mercedes was not a participant and I am completely convinced in my mind that, if CVC wish to sell some or all of F1, the value they can derive from that would be severely diminished if Mercedes was not a participant."