May 22nd, 2012
10:25 AM GMT
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(CNN) – Just days after Facebook took the plunge with a multi-billion dollar shares sale in the U.S., another high-profile brand, Formula One, appears to have accelerated its own plans for a public listing in Singapore.

The Asian city-state is also one of the more unique stops on the 20-race Grand Prix calendar, as the race is staged at night under floodlights.

According to media reports, Singapore’s bourse approved plans for an initial public offering (IPO) to raise as much as $3 billion – which would be its biggest overseas floatation since Hong Kong tycoon Li Ka-Shing's Hutchison Port Holdings Trust raised $5.5 billion last year.

Private-equity firm CVC Capital Partners, which has held a majority stake in F1's holding company since 2006, has already sold a $1.6 billion stake to Waddell & Reed, BlackRock and Norges Bank in a pre-IPO deal, according to Reuters. This takes its stake down to around 40%.

"It raises some capital, which may be required, and it gives the IPO a little bit more credibility if some well-known investment houses come on board pre-IPO," Peter Elston, head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management's Asian unit, told Reuters.

But Justin Harper, a market strategist for IG Markets Singapore, said he would be "very wary" of Formula One's IPO under current market conditions, which saw Facebook’s share price drop 11% on the first day of trading.

"I think it’s similar in a way to Facebook, as in you get caught up in the hype and the glamour of Facebook and Formula 1 as well," he told Agence France-Presse.

"Formula 1 might be the same and not have the support within the market for a big IPO."

With the debt crisis taking hold in Europe, many companies are looking at the cash-rich Asian markets such as Singapore and Hong Kong for investment. Last year, English Premier League football club Manchester United – which has a huge Asian fan base - had a $1 billion share float approved in Singapore.

Despite a huge turnover, the club’s net debt stands at $498.7 million, in part due to the money the U.S.-based Glazer family had to raise to buy the club for $1.2 billion in 2005.

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Filed under: AsiaAuto industryBusiness

soundoff (16 Responses)
  1. Edward

    The F1 is a terribly ugly thing. Imagine grown men wasting precious fuel going in circles. Try to imagine such filthy excess as those who attend. Flaunting priviledge in the most obscene ways. I always cheer when a car goes up in flames.

    May 22, 2012 at 12:34 pm |
  2. Amy

    How very humane of you to ignore the fact that drivers have families. You also ignore the fact that new technologies, fuel-economy and safety practices among them, are originally developed in F1 cars. But, since you are confusing F1 with another automotive sport, I suppose I should cut you some slack, as you clearly don't know what you're talking about.

    May 22, 2012 at 3:15 pm |
  3. Keith Gore

    Singapore is the best in Asia! I love F1.

    May 22, 2012 at 3:56 pm |
  4. Broad Generalizations

    Thats pretty closed minded....

    May 22, 2012 at 5:49 pm |
  5. mezwell

    Why should F1be a company? Why isn't it just a series of racing events hosted by various countries just like tennis or golf or whatever? It seems to me that someone very sneekily took control of it for their own benefit. Can't work it out!

    May 24, 2012 at 3:54 pm |
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    May 26, 2012 at 7:12 pm |
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