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CVC biding time on F1 flotation as new investors come in

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CVC biding time on F1 flotation as new investors come in
Sep 22, 2012, 9:45 AM

[Updated] CVC Capital Partners, which holds 35% of the business that owns Formula 1's commercial rights, has taken on a couple of new high powered ...

[Updated] CVC Capital Partners, which holds 35% of the business that owns Formula 1's commercial rights, has taken on a couple of new high powered investors in the shape of government backed funds from Singapore and Kuwait in recent months, according to reports.

At the same time the sale of CVC's stock which reduced its holding from 63% to around 35% and netted the firm $2.1 billion earlier this year, has also given them the luxury of being able to bide their time on a floatation of the F1 business. A floatation here on the Singapore Stock Exchange was prepared for this Autumn, with a prospectus issued, but was put on hold due to volatile market conditions and the fall out over the Facebook flotation.

For the moment the flotation is on hold and the talk is that there is no immediate plan to revive it, although the preparations are at the point where it can be revived quickly if the conditions should demand it.

However there is quite a lot to be sorted out behind the scenes in F1 first, with the new 2013 Concorde Agreement, a cost control mechanism for teams, sporting regulations and the ongoing role of the FIA still to be finalised. At present, for example, none of the F1 teams are yet entered in the 2013 world championship.

The success of the partial sale of CVC's F1 stock to Waddell & Reed, Norges Bank and Black Rock was that it gave the business three high powered cornerstone investors, allowed them to draw down $2.1 billion to use elsewhere in its businesses and set the value of the F1 business at around $9 billion and bought time on the floatation side.

Meanwhile Sky News' Mark Kleinman, who keeps a close eye on CVC's activities, has reported this week that government backed funds from Singapore and Kuwait "have bought 10% of CVC's management company in a deal, which reinforces its status as one of the most influential private investors in the world."

Meanwhile Bloomberg analysts believe that CVC has already managed a return of almost five times its original investment in F1, back in 2006.

* F1's strong links with Singapore were underlined when it was confirmed on Saturday evening that a new contract had been struck to keep the Grand Prix on the F1 calendar until at least 2017, both sides emphasising how much they meant to each other.

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