F1 owner cuts stake in $1.6 bln deal

Three investment groups have bought a 21% stake in Formula One from private equity firm CVC Capital for $1.6 bln ahead of the motor racing company's planned flotation in Singapore next month.
The deal sets a benchmark valuation of at least $7.6 bln as financial advisers begin to target cornerstone and retail investors during the pre-marketing process of the IPO.
The three investors are U.S. groups Waddell & Reed and BlackRock, along with Norway's Norges Bank Investment Management, the asset management unit of the Norwegian central bank.
CVC has had a 63.4% stake in Formula One since 2006 and has indicated it planned to cut that stake in the motor racing business, a glamour sport that attracts global television audiences of 500 mln for its fortnightly races.
Formula One, which owns the commercial rights to the sport for the next 98 years, earns money from fees paid by circuits to host races, TV income, sponsorship and corporate hospitality. Its revenues are estimated to reach $2 bln for the first time in 2012.
Goldman Sachs, UBS and Morgan Stanley are lead-managing the IPO, which could be Singapore's biggest flotation since Hong Kong billionaire Li Ka-Shing's Hutchison Port Holdings Trust raised $5.5 bln in early 2011.
The IPO is the long awaited public flotation of a franchise led by octogenarian billionaire Bernie Ecclestone, a shrewd negotiator who has expanded the sport from its European roots to faster growing markets.
Formula One is seen tapping into Asian appetite for luxury brands. The IPO is set to be priced before the end of June after the company and its bankers meet with investors and fund managers to gauge demand for the offering.
A flotation would also release the value of a 15% stake held by Lehman Bros when the U.S. investment bank went bust in 2008.
IPOs had their worst start in about four years in the Asia-Pacific region with overall equity market activity down about a fifth from 2011 as investors fretted at buying new shares because of falling markets.
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.