Formula One Group, the motor racing franchise owned by private equity firm CVC Capital Partners Ltd., plans to raise about $450 million for itself by selling new shares as part a $3 billion initial public offering in Singapore, Bloomberg reports citing two people with knowledge of the matter.
The IPO will be the first stapled security IPO with a loan note combined with securities in Singapore.
The proceeds raised from the sale of loan notes will be taxed at a lower rate than those raised from the share portion of the deal.
The deal sets a benchmark valuation of at least $7bn for the company as financial advisers begin to target potential cornerstone and retail investors during the IPO pre-marketing process. The shares are expected to debut next month.
Formula One could have its B+ long-term debt ratings lifted one notch after the IPO because of an expected improvement in its debt profile, Standard & Poor’s said in a May 15 report when it put the company on “positive” watch.
Goldman Sachs (GS.N), UBS (UBSN.VX) and Morgan Stanley (MS.N) are lead-managing the IPO, which could be Singapore’s biggest flotation Hong Kong billionaire Li Ka-Shing’s Hutchison Port Holdings Trust (HPHT.SI) raised $5.5 billion in early 2011.
In 2010, more than half a billion people watched Formula One on television. At $7.6 billion, the IPO would value Formula One at four times this year’s revenue.