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Fancy owning part of an F1 team? Williams to float on stockmarket

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Fancy owning part of an F1 team? Williams to float on stockmarket
Jan 21, 2011, 12:59 PM

Williams plans to make a significant change to the structure of the team to secure it for the future, by announcing that he and his partners plan t...

Williams plans to make a significant change to the structure of the team to secure it for the future, by announcing that he and his partners plan to float the F1 team on the stock market.

Williams objective is to "secure the long term ownership of Williams" in a way that remains true to the ideals with which Frank Williams and Patrick Head started the team in 1977. This involves remaining independent for the long term, beyond the time when Williams and Head are no longer around.

Consideration has no doubt been given to selling equity in the team to a third party, such as the sovereign wealth fund of a country like Qatar, for example, with which Williams has extensive business programmes. But the fact that Williams has decided to go the floatation route, indicates either that he's been unable to find a suitable partner, or that he feels this is the only way to make sure the team stays as it is now, rather than be taken over and suffer a fate like Sauber. The Swiss team was largely sold to BMW but then when the German manufacturer decided not to do F1 it planned to close the team down. Peter Sauber was forced to take the team back if he wanted it to survive. The same could happen to Williams if the principal shareholders sold out.

Frank Williams says he's in good health and plans to race for many years to come.

Although Parr says that the floatation would not be about raising money for the business, for example to expand or build new infrastructure as many businesses do, it surely is about raising some money for the three shareholders, so they can have some cash to show for their years off effort.

At this stage the IPO plan is only under consideration, rather than going ahead, but Williams chairman Adam Parr confirmed that a floatation is on the cards. He said it was about long term planning and to 'future proof' the team. This move would allow race fans to buy shares in the team, share in the profits and keep abreast of the inner workings of a leading F1 team.

"We are not as a company seeking to raise funds," said Parr. "It may please you to know that not only do we think we can (do this) we have always had to run within our means and in 2008 and 2009 we made a profit, we did it again in 2010 and our budget for 2011 is already contracted. Overall we are in good financial health."

It was made clear that Sir Frank Williams will remain the majority shareholder and has no plans to retire. Patrick Head will also remain a 'substantial' shareholding, while Toto Wolff will retain his minority shareholding.

"There comes a point where you are talking to so many people that you cannot have effective conversations without leaks. We thought it was better to explore it properly without worrying about it. Also we didn't want rumours beginning."

One of the issues that arises here is that transparency, as the prospectus will have to give detailed information on the team's income and outgoings and there may be a concern among other teams and FOM about confidentiality, especially regarding the terms of the Concorde Agreement, which are kept secret for all but the stakeholders. But Parr said,

"We've been working intensively with our partners in this process to ensure that the level of disclosure necessary will protect the confidentiality," he said. "We will have to show our revenues and our costs and I feel comfortable on that point. We will be transparent. This has nothing to do with the timing of any future (Concorde) agreement. We have a number of high value commercial agreements and these can last three years or five years, but they are part of the future of the business."

Publicly listing a sports team has been done before, especially with football clubs, but it's not in vogue currently. Most of the teams, like Tottenham Hotspur, that were listed are no longer. In the USA the Green Bay Packers NFL team has over 100,000 shareholders, but this is more of a community ownership scheme rather than a public offering, as the shares do no trade on the open market.

Meanwhile a floatation of the commercial arm of F1, FOM, has been mooted as a possible exit for private equity firm CVC at some point in the future. Bernie Ecclestone has looked at it in the past, but there has not been any talk about it recently. Williams could serve as quite an interesting test case for the sport as a whole.

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Series Formula 1
Teams Williams