April 2, 2023

DealBook: Formula One May Delay $3 Billion I.P.O. in Singapore

The current Formula One racing season kicked off in March and has already included races in Malaysia and other countries.Diego Azubel/European Pressphoto AgencyThe current Formula One racing season kicked off in March and has already included races in Malaysia and other countries.

HONG KONG–The Formula One Group’s plans for a $3 billion Singapore listing may be delayed, a person with direct knowledge of the matter said on Friday, after three other initial public offerings in Asia were pulled this week.

Formula One, the London-based racing group headed by the 81-year-old billionaire Bernie Ecclestone, looks to have become the latest victim of an increasingly hostile turn in the global market for I.P.O.’s.

Formula One started preliminary marketing of the deal to institutional investors two weeks ago, with the goal of listing on the Singapore stock market by the end of this month, another person with knowledge of the plans had previously said.

‘‘The company is continuing to talk to investors,’’ the first person said Friday, speaking on condition of anonymity. ‘‘In the last few days, the market has obviously been pretty bad.’’

Formula One had not formally kicked off its listing by taking share orders, and based on comments made Thursday by Mr. Ecclestone, it appeared unlikely that it would do so any time in the immediate future.

‘‘My feeling is it’s probably a better idea to get everything ready and then go ahead at two months’ notice when the markets have settled down,’’ Mr. Ecclestone said, according to Bloomberg News.

‘‘There’s no rush, the markets aren’t good at the moment, it doesn’t inspire people,’’ he told the news agency on Thursday. ‘‘We don’t have to do it now.’’

On Thursday, Graff Diamonds pulled an I.P.O. in Hong Kong that had been planned to raise $1 billion, citing slumping markets that were a ‘‘significant barrier’’ to getting the deal done. Graff, a top-end gemstone retailer, had planned to price its offering on Friday and begin trading next week.

Earlier this week, two other Chinese companies withdrew plans for share offerings in Hong Kong that would have raised up to $750 million between them. China Nonferrous Mining, which has copper mines in Zambia, canceled plans for a listing on Wednesday, while the luxury car dealer China Yongda Automobile Services said Monday that it was pulling its $432 million I.P.O. because of ‘‘the recent deterioration of the equity market.’’

Formula One’s offering would have been the biggest in Asia in the year to date, and the second biggest globally after Facebook’s $16 billion Nasdaq listing last month.

Including the pulled Graff offering, $13.6 billion worth of I.P.O.’s have been withdrawn or postponed globally in the year to date, according to data from Dealogic. In Asia, 41 deals worth $3 billion have been pulled or postponed so far this year, compared with 40 deals worth $2.7 billion during the same period a year ago.

Formula One hired Goldman Sachs, Morgan Stanley and UBS as the lead coordinators of its share offering.

The controlling shareholder, CVC Capital Partners, the private equity firm based in London, said on May 22 it had sold a 21 percent stake in the racing group for $1.6 billion to Waddell Reed, Norges Bank and BlackRock. CVC retains a 42 percent stake in the company.

Formula One has sought to expand its fan base across Asia by staging six of its 20 races this year in the region. The current racing season kicked off in March and has already included contests in China and Malaysia, with stops in Singapore, Japan, South Korea and India coming later in the year.

The company, which makes money by managing the commercial rights related to the sport, employs 200 people and last year booked revenue of 1.17 billion euros ($1.5 billion). In March, Formula One refinanced $1.8 billion in debt. In light of that restructuring, and in anticipation of proceeds from the planned I.P.O., Standard Poor’s had put the racing group on watch for a credit rating upgrade.

Article source: http://dealbook.nytimes.com/2012/06/01/formula-one-may-delay-3-billion-i-p-o-in-singapore/?partner=rss&emc=rss