Formula 1, the popular global auto racing sport, will go public in Singapore next month, after CVC Capital Partners Ltd., has received the go-ahead from the Singapore Exchange for an initial public offering.
The deal sets a benchmark valuation of at least $7.6 billion for the company as financial advisers begin to target cornerstone and retail investors during the pre-marketing process of the IPO.
Goldman Sachs Group Inc., Morgan Stanley and UBS AG are lead managers for Formula One’s IPO, people with knowledge of the matter said last month. DBS Group Holdings Ltd., CIMB Group Holdings Bhd and Banco Santander SA have also been retained for the sale, they said.
“This is great news for Formula One and an important step in its development,” said Donald Mackenzie, a CVC managing partner.
In addition, Bernie Ecclestone, told Bloomberg: “It’s (the IPO) cheap compared to Facebook,” referring to the social networking site that raised $16 billion in an IPO last week.
Formula One’s total revenue is expected to hit $2 billion this year and reach $3.3 billion by 2016.
Meanwhile, with an enterprise value of $66 billion, Facebook, is being valued at 13 times this year’s expected revenue of $5.1 billion. Do you really think Facebook , which faces some serious challenges, is going to grow almost three times faster than Formula One?
In addition, a race in Austin, Texas, scheduled for Nov. 18 would end Formula One’s five-year absence from the U.S., where Nascar is more popular.
The social networking giant — initially valued at $104 billion — held its long-awaited IPO on May 18, only to see its stock barely rise above the opening price of $38. However, by May 22, the stock had fallen by 18%, closing at $31 — reducing the value of the stocks sold during the $16 billion IPO by more than $2.9 billion.
“I thought it would be fun to get in on the initial frenzy,” said Linda Lantz, an online marketer in Granite Bay, California, who bought 100 shares. “Now it makes me think ‘Oh god, should I bail or is it going to come back?'”
Financial regulators are investigating whether banks in charge of the IPO broke rules on the floatation’s eve by selectively releasing negative news about Facebook to big investors but not the general public.
Morgan Stanley declined to comment, but it did release a statement Tuesday saying it had followed the same procedures in this IPO that it does in all of the others it handles and had complied with all applicable regulations.
In addition, Facebook founder Mark Zuckerberg has been sued by the social media network’s shareholders over its disastrous IPO.
The lawsuit accuses Mr Zuckerberg, Facebook and several banks led by Morgan Stanley of hiding the company’s weakened growth forecasts ahead of its $16bn initial public offering.