The Formula One group, which is largely owned by CVC Capital Partners, is planning to list around 20 percent of the shares of the company on the Singapore Stock Exchange in July, with the goal of raising between $1.5 billion and $2 billion. This would value the company at around $10 billion. This is a very aggressive timeline for an IPO and it remains to be seen whether investors will go for the shares.
There are a number of significant questions that will cloud the value of the company. There is talk of a new Concorde Agreement being in the pipeline, but it is not yet signed and there is also the potential of legal action from at least one very large company that is not part of the deal at the moment. In addition there are questions about the company leadership. Bernie Ecclestone is 81 years of age and still doing a great job, but there is no sign of any succession plan, at least not one that has been made public. It could be that CVC plans to put someone like Sir Martin Sorrell, a current board member of the group’s holding company, into the leading role, but that will not happen until Ecclestone disappears from the scene.
There are also questions about various legal actions that could affect Ecclestone’s situation. Those are the risks for investors. On the upside, there is the potential of an expanded World Championship, with higher revenues, although these will inevitably be the source of discontent in the ranks of the teams, which believe that they should be getting a much higher share of the revenues. There is a also a significant debt load.
Formula One has appointed Goldman Sachs and UBS as its joint global co-ordinators for the IPO. Goldman has been advising CVC for some time and UBS is an F1 sponsor. There are four additional joint bookrunners: Morgan Stanley, Banco Santander, Singapore’s DBS Group and and Malaysia’s CIMB. They will now work to find syndicates and underwriters who will place the shares with investors. The next step will be road shows and discussions about the best offering price and the timetable for the flotation. The idea of using multiple bookrunners is to try to improve the offer price.
The disadvantages of an IPO for Formula One include requirements to disclose financial and business information which has never been a Formula One strongpoint, even before a flotation can be achieved. There is a risk that the required funding will not be raised, as happened before when a previous attempt was made to float.
A listing in Asia is clearly an attempt to cash in on the region’s interest in international sporting brands.
I look forward to reading the weasel words in the prospectus, which I hope someone will put online somewhere.
Joe if you hear of it being available anywhere, a heads up would be appreciated.
Wilson
Being Bernie’s Advocate, but how many non weasely prospectii can you recall?!!
I must brush up on the rules in more detail, but if you follow the link below, 17.4.11 seems to allow exemption from prospectus if all sold to institutions. So might have to keep an eye your pension fund is not stuffed with CVC’s IOUs. But 17.4.12 allows the authority to revoke that exemption in public interest. Maybe we should keep an eye out, and write in if nothing appears. Chap whose blog I find always thorough and enlightening, John Hempton short sells for his fund, and might love this*.
http://www.singaporelaw.sg/content/CorporateFinance.html
*not affiliated in any way, nor even a correspondent with Hempton. Just a very rare example of someone writing how you tear to shreds false claims for a living. His recent “Daddy you are more evil than I thought” piece is almost classic as to the twisted moral values one has to juggle, and has sealed my admiration for him. Admiration aside, if we want to complain if there’s no prospectus, there’s someone to ask help.
John,
There’s weasely and then there’s really weasely weasely. I know which category I think the CVC IPO prospectus would fall into. I don’t know what their bonds are currently rated at – does anyone?
Wilson
Hi Wilson,
is there a point beyond which the English language may be tortured further, or is there a kind of event horizon, a short sharp permanent occlusion of meaning, a fracture failure of intelligibility?
Of course, some say I pass that point somewhat too frequently in my comments, but ..
I am not sure if their bonds received a rating, thinking about the current replacement ones. Feels like dodgy dentistry, fixerupper finance, not remedy to the caries fissure. When I speak with my buddy later, I’ll demand he looks up the CUSIP on his B’berg see if anything. Think my guess was not wrong, though, that this float is a required “out” for that fresh finance.
I know what you mean, of course, it being a matter of degrees. If there is a prospectus, I reckon our crowd of readers here had better peruse it strictly in company trained in the Heimlich Maneuver . .
sorry to be childish, trying to prove my cynic’s credentials. I think the way to get attention paid to this is because somewhere, buried deep in an inaccessible vault, will be the most twisted of instruments that is worthy of academic study. I plain don’t have a clue how they are going to get this written up, but it is tantalising, like awaiting a Roger Corman flick, he the king of B- movies. . . come to think of it, IIRC he was producer on that Singapore screener i mention below . . .
best from me – j
Joe, do you think that the listing would be more successful if BE appeared, to the world outside of F1, to be less of a loose cannon, or would a business-world perception simply be that he knows what he’s doing?
Interesting. Do you have an opinion on what/who a successor to Bernie Eccelestone might look like?
“Après moi, le déluge”?
Good one.
I would have thought that the listing in Asia was largely an attempt to avoid some of the disclosure requirements of European or US bourses.
or maybe that all the money is in asia nowadays as the old west becomes the new third world!
If someone with money wants to own a part of F1, the location of the listing is largely irrelevant.
I dont think this should be described as a Formula One IPO but rather “CVC exploits F1 to the max and then cashes-in and leaves the teams to bear the cost of funding the debts created by CVC exploiting the F1 brand”.
I hope Mercedes does take legal action instead of letting Ecclestone push them around any way he wants like most of the other teams.
This 20% is presumably the holding of the financial giant LBL (15.3%) which is now in administration, (plus a bit possibly from Churchill [0.7%] and/or JPMW [3%]). (Going by the layout Joe included in his blog about a year ago.)
Thus actually mainly not CVC but the US administrator who is selling. So could this be a smokescreen, a means of hiding that a part of F1 is being offered in a “Fire Sale”. Or did CVC already buy the LBL share back from the administrator? If so for how much and how did they jump the queue?
This must go very much against Bernie’s instincts because he does like to be in total control and not answerable to anyone. I cannot see this as a public offering, it must end up as a private purchase. The only benefit of it being an IPO that I can see is the dilution of share power, since it is rare that shareholders act in concert.
As for Bernie’s replacement, it is unlikely we shall find anyone like him, a “dealaholic” a conjurer, a thinker so far outside the box, that he bought the box and sold it several times over. Both hard as nails and a fantastic friend (to the few). Whilst it may be possible to replace him, it would not be the same.
I used to despise his apparent obsession with making money until I read a couple of his biographies and realised that it was not about the money but the deal, the money was a by product though often the means by which the success of the deal was measured, but it was out-thinking the opposition that mattered.
It is the deal, but new drivers have appeared over the years. When in an interview some 40 years ago I asked Bernie what motivated him, his reply was : “If I do a deal with someone, even if it is for only two quid, I want him to pay me a quid more than he wanted to.” However, when I asked him some 20 years later if that was still the motivation, he said :”Now, I don’t want to see something I have built up, torn down.” I suspect the motivation of the deal was still there, too. (Quotes approximate).
I am driven to ask, then, if all that was built up, is based on the extra quid, and therefore built upon unhappy money? My theory being what is of ultimate value is created from that which freely given. Thank you Canehan, for your recollection and vignette and plain expression. So much more of that is needed.
The financial foundation of the system, squeezed, would therefore have failed my late partner’s “is it any good?” test after not more than two or three iterations. It is almost frightening to try to unravel what is going on and has passed, because like Robert De Niro’s character in Brazil, (Tuttle/Buttle) do we see the man (the people of F1) suffocated by papers and struggle to free him (them) only to discover the man has disappeared?
Joe
It used to be the case that the F.I.A. held a, “Golden Share”, if that is the right term. This enabled the F.I.A. to block a transfer of, “right to exploit the commercial rights of F1″ to a person or organisation deemed to be unsuitable.
Is that “Golden Share” still valid?
If so, could it be exercised to prevent this I.P.O.? Who knows where this 20 percent could end up?
Martin
The FIA, I believe, still has the right to veto a change of ownership, but selling 20 percent of the business would not qualify as that.
Mr E. has the ‘Golden Share’ which gives him the casting vote at board meetings.
The FIA and its president has a right of veto if they consider any potential purchaser to be inappropriate. This is because the FIA still owns the commercial rights to F1, they have only leased them out.
Only in Formula 1.
“Mr E. has the ‘Golden Share’ which gives him the casting vote at board meetings.”
According to Mr C. Sylt he lost that the last time the business was sold, ie to CVC. as part of the conditions of the sale. I had a protracted “misunderstanding” with him on JA’s blog last year in which he made it clear that the previous “My vote beats all of yours” had been given up, I was wrong and knew nothing. (which of course is often the case, but Mr Sylt seems to claim inside knowledge of and access to the workings of F1, thus had some credibility, as he also claims with his partner to be the only journalists to write about F1 finances)
Not correct. The investment and shareholders agreement confers special rights to the single share (golden Share) in Delta Prefco, which include the casting vote at board meetings. There are 6 share holders, Mr.E, CVC, Lehman Brothers, Bambino, JP Morgan and Churchill Capital.
Maybe Christain was thinking a casting vote in Delta Topco, which Mr.E doesn’t have.
Karen
So, just to be clear, is the single share(golden share) the casting vote in the event of a 3-3 vote at Delta Prefco?
Or is it, as Rpaco suggests above, a “My vote beats all of yours”, i.e. a veto?
Further question, if this 20% I.P.O. is really a private deal, (or an IPO to preferred buyers) as Rpaco and others have suggested, at what point can the FIA step in and exercise their right of veto? CVC could potentially do another IPO for a further 20-ish % next year and a few more % the year after that and the ownership of the lease to exploit the commercial rights has changed hands.
Martin
Since at the time as far as I knew Delta Topco was the highest layer then Mr Sylt was undoubtedly referring to that.
Ah, I knew there would be a way around Bernie loosing that! Just add yet another layer with the golden share restored. Presumably Delta Prefco owns Delta Topco. Thanks Karen, that alters things considerably.
What has happened to Lehman Bros vote? Since they are in administration presumably this has become the property of PWC (who have just notched up $500m in fees) Can their vote be exercised in the administrator’s name?
I now note that my earlier guess (above) is likely to be verified in that it is not CVC selling part of F1 but the LBL administrator, PWC and the figure of 20% is just approximate. (and should read 15.3%)
I quote Mr Sylt from the Guardian 7th March: “The collapsed US bank Lehman Brothers has committed itself to cashing in its stake in Formula One motor racing within two years, according to documents released as part of the ongoing unwinding of the company. The stake is expected to yield a $1.5bn (£950m) payout to Lehman’s creditors, who are owed $450bn.” This comes from here: http://www.guardian.co.uk/business/2012/mar/07/lehman-brothers-to-sell-formula-one-stake.
Would you care to advise where the “20% to be floated” is coming from, if not LBL, maybe CVC is lobbing in 4.7% or was I right in my earlier post? (@10:54)
FT article today suggests “Mr Brabeck-Letmathe will take the chairmanship if the flotation proceeds, which is pencilled in for June and which is expected to offer up to 30 per cent of shares to investors.”
The IPO is to refinance the acquisition loan and “Although CVC has previously said it had no plans to use proceeds from the float to pay a dividend, it is understood that up to $1bn could be returned to shareholders.” Further, “CVC bought a majority stake in F1 in 2006 for $1.7bn. It has twice before refinanced its debt and it is seeking to reduce the size of loans to £2.3bn and extend their maturity dates to 2017 and 2018.”
http://www.ft.com/cms/s/0/b4306c70-8f08-11e1-aa12-00144feab49a.html#axzz1t8KRlmtx for full article (although you may have to be registered (although it may be free for a trial)).
Yes I have just read it, interestingly it talks about Delta Topco, however Karen has now revealed the existence of Delta Prefco, which throws another tangle in the F1 ownership web. 22 companies in at least 4 countries and probably several more. Then there’s the GP2 side with another seven companies.
It gets more difficult to see exactly what is being floated and by whom.
I can find reference to Prefco in documents from Lehman’s UK insolvency dating back at least 3 years, with a quick dumb search.
So how come we have overlooked it for so long?
I think Karen means Prefco holds the golden share, simple as that. I’m inclined to believe Karen, though I gripe she could be more forthcoming, as would befit someone involved in a public flotation.
But as I pointed out, this may be a stock exchange flotation, but there may be no need of anything to be public. Plus, one might expect all to go quiet, according to the usual rules, for a period before trading begins.
Prefco begs more scrutiny.
Anyhow the existence of Prefco clearly has been known to the insolvency crew at Lehman and hence no doubt much elsewhere, for a fair while.
Mr. Sylt sheepishly says he overlooked it accidentally, in a article last year. But we know he’s a preferred Bernie conduit, tend to ignore him. I’m far more concerned however as to why our crowd here missed it. I feel like I’ve been handed the dunce’s cap, for one.
My week has been so topsy-turvey the only consistent feature of these recent days has been a lengthening beard. So not gotten around to hassling my buddy to help me with some database digging. I shall have to do my usual: cook up an epic sunday lunch, whisk that over to his office, and monopolize his terminals and leech his culinarily fortified renewed brainpower.. Yeah, open all hours, my pals. No slouches. Actually I think I had better prepare for camping out because i never started on my database jaunt to virtually visit Mauritius. Some guys may have their journalistic “sources”, ahem, but I find home cooking has a powerful effect when you want honest help and straight talk! (more men in business should try this, especially if you are in a typically macho environment. I promise you it’s effective to get across sensible talk, stop everyone measuring their you know whats)
I tend to think that conspiracy theory is a bit of a waste of time, in analyzing companies. Or qualifying that, conspiracy theory seems to play out far more often with smaller outfits than expensively administered high profile setups. Still, despite I take Karen always at face value, there’s more to understand here.
Lesson learned by me today: I should not ever put off any research, even if like this it is for our enjoyment, not work. You get rusty.
This carries most of the story http://www.pitpass.com/fes_php/pitpass_print_article.php?fes_art_id=43560
Written by Bernie Ecclestone’s PR department…
But nonetheless reveals the dangers for anyone buying anything from Bernie. Are you actually buying what you thought you were? In this case buying shares in Delta Topco is useless as I suspected.
i thought you would have recognized my cynicism as to that article, rpaco. I was actually describing what I thought of it, across several paras!
It’s not a helpful thing to read. Not only because it’s just print out from Bernie’s Super Secret Hotline Prime Source Telex, but because as usual with the author, it simply goes nowhere. I think his job is to write supposed revelations at about the time they become sensitive to Bernie, and do his darnedest to obfuscate any significance by attributing all manner of invented illogic thereto. He does a smothering job. Not very well, I might add.
Why actual newspapers carry his articles, I have no idea. They have real reason to feel squeamish about this man’s writing and overt absence of neutrality.
Unfortunately, it’s a bitch of a world in advertising, and most editors are poodles. I screamed blue murder at “advertorial” carried in trade rags when I was 17. That was blatant stuff, and being blatant, almost tolerable. But that was plenty enough to get my back up as a boy: I really overreacted, but not as bad as what later i quickly got to see.
When you joke am i the butcher the baker, the candlestick maker, rpaco, well you see I had to learn all that to save my backside once i set out to professionally get the hump with bent advertising influences. One day soon I hope you’ll see it all clear as day – or maybe the fastest burning momentary light, as i re-enter earth’s orbit and crash. (I may therefore have to direct you the right azimuth, in case you miss it. I am realistic how slim my chances.)
My beef is not with Mr Sylt, but with how pernicious the promise of a big ad campaign can be to editorial integrity. That’s also why I cling to here, like I’ve no home to go to, because it’s not every day you find somewhere that straight talks. For me, this place is golden rocking horse doo.
Those who tried to argue otherwise (TF relation, and supposed biases) sadly were without realizing it being hypocritical. Because they were implying and assumption that far more famous and supposedly notable journals do not swoon and toss out their ethical playbook when the ad man cometh.
If anything, I feel for Mr Sylt, as I think he has played Leperello so long as to have become his master, and he I suspect could do better by more honestly playing his games my side of the fence. Not my side as in with me, please note. Just I think that there is a sadness that befalls people when they maintain mixed up lives. Just lately, I have become sensitive to the parables right in front of me, in people I meet. I see so acutely, recently, that whoever maintains a conflicted position in life also seems to have had a poor lot, and unfortunate experiences. I was brought up by religious people, one of whom attempted to redirect that influence to philosophy and agnosticism, but lately I cannot help but keep seeing the desperate ill effect upon those who are not true to their own self. I have been surprised how much of the scriptures which mean to ward off mistakes in life, are alive before me. I reckon that’s fair since the good books were written from long experience, and one can keep notion of any God out of it, as the books were meant to provide a guide to daily life. But anyhow, I’ve been really taken aback and shook up.
I do in fact think it is a moral thing, to write about how a large body of people are perceived. Consequently I believe it is amoral to to tell porkies which mess around in anything which can affect those people. If you claim affinity to a tribe called F1, what are you doing trying to turn it into a plaything?
“Oh, sorry, I knew about this years ago, and overlooked it. Oops, sorry” is about the intro to that article, how I read it.
Right. So how did that not strike the author as important, first time around?
I’m serious I have no beef with that Mr Sylt. I wish him no ill, in fact the opposite. I’m no saint, but no writer is going to even register on my scale of being personally offended. (It’s the opposite, actually, press media authors can only go up in my estimation)
But he should start to consider that the last thing the F1 peoples need now, is more shhh stirring and half truths.
Anything further, I think I should write to the man, directly, proper old fashioned letter. Because anything more I might say should be said direct, and not be construed as anonymous adhominem. The rest of this is my observations personally of life, not a crack at Mr Sylt.
I hope by now you guys trust me I am not beating up on anyone nor do i ever have such inclinations. Or if I have such, I do not indulge them.
This is not meant as any defense of any writer or journalist, but just the tempering side of my thoughts: maybe I would take the Ecclestone Shilling, myself, if that was necessary for my family. I think I’d be a lot smarter about it, though. And it would have to be “FU bread”. And then I’d accept my living purgatory only on narrow grounds. But maybe I would do it.
You don’t ever know what pain exists in someone else’s life that they may seek to assuage by taking a rotten job. I don’t propose this as a scenario for who we talk about, or proffer what I say as mitigation, because I have no knowledge. Just an example that I could see myself making certain choices. If my mother was prognosed with something really bad, for example, I’d scramble everything to get her care, in an instant and without hesitation.
Yet the type who sell out quick, sell everything in a fire sale, never get anything they want or need. Nor ever can raise their price.
You don’t need to consider Faust to understand this. Petty cheats everywhere have to justify themselves forever because they are only conning themselves and so have to forever sell themselves again, and fib and fib.
Forgive me, I have been deeply affected by finally learning the story of a friend – still a friend – who is a living example of this purgatory. He took to telephoning me far too often in recent weeks, just acting lost. His life is a horror story, but it only showed itself to me when i became his “last friend”. There’s so much anger in him, it’s almost unbearable, but okay, I have to react some way, and the whole pitch of it is him begging not to be discarded any more. Someone who everyone wonders why it all goes wrong for him and is inclined to blame others. But the close contact I have had, because i was it seems that last resort to speak to, has unraveled a very simple moral tale. No specifics will be spoken. Just that I really see now that deceit is the most cruel of human failings. Well, I read that as a boy in the Bible. I just never had it hit home with example, before.
I’m still in shock, because I now see this same story unfolding everywhere I look. I believe in man, not God, in the sense that it is the next man who can change your life, or show you the way, or pick you up from a fall. I really care not for religion. Just about being around good people. But how many define themselves as good people, and expect you to take them on trust? Well, that is probably everyone.
If you really are a reporter, being true to oneself is the most fundamental of qualities. Not some ethics guidebook handed out in “media studies” class, it has to be an innate quality. Con yourself, con everyone. Once you think you can con, that cons you, and the slide begins. I would get too upset to type the smallest vignette of what i have learned are consequences of that.
It must be obvious why I write, or I hope it is, because I wish in another scene, through some other way, I could offer a hand to a writer who seems to have lost his directions to Damascus. If you treat the world harshly, maybe that is all you can expect. But all of life depends on each of us confounding that expectation.
Keeping a copy of this, because it really is too much for a F1 blog. I might be better to weave this in in simpler precis, but at least it’s all in one draft I can cut and paste to my notebook.
I just recently got seriously concerned that everyone in the sport is being compromised and affected by the nonsense talk, propaganda and twisting in the media, the lack of facts and honesty. I am angry at myself I could have done some simple digging in the databases, which I am off to do a bit later now.
The problem I see is that all the mainstream coverage of F1 is too cynical, has no connexion and no care. It’s just a column inches versus advert yield equation.
Maybe this is just my plea to all the other lot who write about F1 out there, to bang their heads together and realize that it could very well be, this sport is being sold yet again under everyone’s eyes, and that a chance to fix this may not come for another decade, or even at all. Once those shares are on the market, as long as ZIRP persists, they will keep going up, rocketing the nominal value beyond any semi-sane pursuer or lobby of interests to acquire it. I’d rather it pass through fickle hands of crackers billionaires, than what I sense is a final lockup,
I mean lock OUT, of anyone who could do a thing and mean it. I feel they are finally ensuring F1 is out of reach of anyone who care or is involved in it.
I do hope I am wrong. But the reason I started all this, is because every journalist – no matter who – who lives writing about F1 should lift their standards and start wondering what is going on.
I think if the media who live off F1 do not get involved now, and get paying attention to this, they are ultimately stifling themselves and risking the whole game. Maybe I mean this as some kind of call to arms. I don’t care who it is who gets the straight story on these financial shenanigans, but there has to be more than Joe out there telling the story, to get enough attention. I am fearful for the sport I love and at the best of times, think it appalling for journalists to snipe at each-other. But at this minute, I believe all eyes must be focused on the true issue, which is what is being sold, how, why, who are the real players, and how do we stop a bunch of juvenile but technically talented bankers buggering up the circus for everyone? Is that not enough common interest at stake? Or are some journalists going to carry on with their pretenses and keep regurgitating corrupted lines? Rivalries should not be a part of this, nor differences in education, nor social influences or proximity to Prince’s Gate.
This may be the first time I put together in one argument all that bothers me in F1 now, only excluding the sponsorship worries, which be a whole other issue. I think also I managed to explain why i think so much about all this, despite it is not even close to my making a living. Why I spend so much time here anyway. I have no plot or plan or manifesto (okay, my race calendar ideas are a manifesto if put together properly) just a lot of loyalty and care for the recreation that makes me happy when it’s good. Obviously take it or leave it, but i actually started to think the mess we’re all in is classical, and far more readily understood in those terms. I shall now get my head down to be finding out facts, having i think more than adequately stated my opinion.
Make of the above what you will. I saw some moral truths up close, lately, and maybe because I have a hammer, everything is a nail, but there could be some good in thinking about what I write. Offered up on the off – chance it might help.
Is the company as in “there is also the potential of legal action from at least one very large company that is not part of the deal at the moment” Williams?
I know you worded that that way for a reason but could you please let on?
ALSO, could the teams buy the 20% if they got themselves together and/or what are the chances these are non-voting shares?
Mercedes-Benz
!
Now I remember about Mercedes being left out. Strange why, do you have any theories as to why Bernie would ‘forget’ while Red Bull were remembered?
Joe I am surprised you stuck to a single line of “There is a risk that the required funding will not be raised, as happened before when a previous attempt was made to float.”
If they fail to successfully float it would be a train wreck because overnight you devalue what CVC is holding and they can’t get that paper value back easily. So is this going to be a public flotation or a private one? I would think they must have some investor groups in mind they hope to bid against one another already in a private offering. The whole thing appears to be a little bit wishful thinking in the current market and if others don’t see F1 as valuable as Bernie and CVC have made it seem in recent years, by milking it of cash, then the whole thing goes into a downward spiral. Even if you can get blood from a stone, it is still a finite resource. Nothing has unlimited value. Another four races a season does not make much more of a resource to milk over today’s assets. I have to think there are two or more groups lined up to create good demand, but it could be that all the money in recent years they have milked makes them believe the gravy train is endless and they are misreading the demand for the supply they have.
Thats what underwriters are for.
Any idea what kind of voting rights new shareholders will be afforded? Can’t imagine that Bernie et al would be giving up any control.
Well, isnt there an argument that they are more likely to succeed when “cashing in on Asia’s interest” in F1 now rather than later, when the circuits become tired of the constant hard bargaining of F1 and – noting the decline in European races – realize that F1 needs Asia more than it needs F1?
I’d like to see some financials to back up that valuation. Joe, any idea what the EBITDA is?
Revenues in 2010 were around $1.6 billion, the 2011 figure will be higher. But one cannot trust most sources of information, as a lot of the estimates are being made up.
Side note: take a look at what you can get as a interest rate on a modest sum today at a supposedly stable bank. The revenue ratio looks at first sight very healthy, even at a 10BLN valuation. (Joe I am pretty sure is citing a gross estimate, not nett, regulsr readers know the splits) and you can start to imagine this is not the worst thing ever. What sucks is all the pitfalls (ugh, awful pun, dear me) we go on about here all the time. Then you might temper that with the rather impressive way F1 carries on blinkered regardless. Which carry on regardless is mighty impressive, even if tainted by purely mercenary interests. The thing is that this might get sold on benefit of the doubt. Which is why I expect the thinnest float of stock permissible, so that short sellers are frustrated.
Presumably the teams knew of the impending IPO schedule, and that meant no way were we going to see dissent over Bahrein.
It’s a very desperate jigsaw puzzle, and I the reason it’s left messy I think is because no-one will like the picture when the last annoying piece is ham-fisted into place, just as you do, all fed up and exhausted after a long family Christmas.
I really do think we should get writing in to the Monetary Authority of Singapore, to insist it is in the genuine public interest to insist on a full published prospectus. Plenty enough of us just here who know how to argue that.
My own personal reason for avoiding mainstream banking is simply this whole racket of co-opting everyone’s pensions for extravagant fees which despoil any returns. Obviously that is just one aspect of banking, but it’s where the wall of money comes from.
If you would like a excellent personal read on how mutual funds got to be popular, well, it was because one guy actually meant to do the right thing, chap called Jack Dreyfus. His auto biography, The Lion Of Wall Street is a saga of him fighting crippling depression caused – as i recall the narrative – in no small part because he was trying to find an honest way to look after customers’ money. I found it upsetting as much as enlightening. I read it when still a teen, and it deeply impressed me as a human story. I believe it is out of print. Google Books has it classified under “Psychopathology”. Do you even need another word to tell you why banking ruins formative morals?
The Singapore dollar is also a pretty stable currency. Much more stable than the Euro/GBP or USD.
But, whilst we’re on about transparency, the SGP is pegged to a secret basket of currencies . . . all very above board, naturally.
Unfair to single them out though, if you dare more than glance at what our central banks are up to. Recently read Lords Of Finance by Liaquat Ahamed, which is a amazingly poised “quick” take on the history of central banking characters and policy. (the character analysis is what kept my interest) Reason to pay attention is because just about every stock market move anywhere is now joined at the hip to money policy. Goes up when cash is printed, goes down when pols argue maybe we should not print another profligate trillion. Okay, not so simple, but that is a major effect ensuring public stocks just are a hopeless place to find our genuine values of anything, and a reason why I am unsure stocks make any sense for even very dedicated amateurs like me. This, I believe, is why everything gets jimmied into your pension fund now. The reality is the facts of the underlying are too ugly for public scrutiny. Just lie back and think of true capitalism.
It goes far into the background detail, but search for “Jim Grant + Zerohedge”, take the first link you are served up, and you have a heart rending exposition of just how money policy is making a mockery of the market. That might be the most educative and cautionary explanatory read I’ve come across as to why it all seems so impenetrably bent.
Now, given there’s hardly any rules, why don’t we preempt Bernie and launch a cash shell to counterbid for what CVC is dumping? Oh, would have to overpay, but everything is inflated, and we might just actually try to fix this broken mess . .
does this mean that the concorde agreement (when signed) will be available for public viewing?…or are the laws for such a thing a little looser in Asia?
I doubt that the Concorde Agreement will become public information. It did not in the case of the Williams F1 flotation.
But wasn’t that more due to listing in Germany and their lower levels of disclosure needed? or does the Singapore exchange have the same levels of disclosure?
Also why would any put these long term values on a sport that has no assets except a briefcase full of contracts is beyond me, once the music has stopped someone will be left with that useless briefcase.
I always figured the briefcase that holds the Concorde agreement would glow when opened like the one in Pulp Fiction
I agree with Roger that the choice of Singapore reflects the same preference to minimise disclosure that prevented a US or European flotation in the 1990s. I also share Jerry’s suspicion that Bernie doesn’t care about the succession issue. A complete disintegration of the entire F1 edifice in the wake of BCE’s departing the scene would suit his ego just as well as – if not more than – a successful transition.
As I understand it, the open market (which you may take to mean light or very light regulation, cough splutter) was a conditional deal brokered by Walter Wriston, when he was head of Citibank, in the 70s. The deal was Citi, then the heart of laundering the petrodollar printing boom (to deflate the oil shock by devaluation – notice any modern parallels?) would ensure Singapore got to be a money center, in return they had somewhere to trade alternative to the rather embarrassing (because it was reaction to silly tax laws) euro-dollar market which though arisen in Luxembourg was now London’s baby. They were irked that us Europeans were setting money prices, to say the least. (and even more so that a very upper class Anglo – Italian gent, blast it, forget his name, had masterminded this ever so neat co-option of so much vital business)
That’s an awfully potted attempt on the history, but it helped Singapore enormously, and goes some way to explain why we might just be “officially happy” there’s zip diddly regulation thataway. So, ironically, you might argue full circle, that if there was any serious regulation, there’d be no modern Singapore, and hence no Grand Prix, and ultimately no F1 IPO in the territory . . .
Great movie, if you can get a copy, for the scenery of Singapore, is Saint Jack. You may not stomach the storyline, and it’s almost a remake of an earlier and far more accomplished flick about a pimp, but Ben Gazarra, Denholm Elliot and filmed secretly without permission on location make it a substantial morsel. Just enjoy the scenery. Not family viewing, really not, I mean Hugh Heffner was a producer (presumably bankrolled it). But thought of it as this IPO has a nostalgic air of laissez faire sleaze about it.
Two things occur to me JoJ: Firstly if one is going to invest in a single share, one should do the homework first, this applies to everyone in every market. Now the very fact that Singapore is being used and the real full books will not be seen, in itself tells a tale, however you must look at the fundamentals and the key ratios. Obviously you need all the figures in order to do this, if they are not available then it is simple, bargepole time. It has to be a private placement not a float!
The other is that Saint Jack is a very good read by Paul Theroux, whose railway travelogues in S America are on my list to re read one day. However Denholm Elliot was the epitome of the character as written. Also a fine collection of unusual stories for a plane trip Joe mostly in hot climes.
Yes, but with the paucity of information, pricing a F1 Holding (or however it shall be called) share is mark to model. Which is just where the latest mess started. (will simply be sick if i think of the Basel “requirements”)
I bet we could piece together a pretty good set of Excel macros between us, but I genuinely doubt any hard facts will be attainable. I remember the first time I read GAAP (Generally Accepted Accounting Practices) and realized, wow, you had to make assumptions about every line, and so started to write little scrappy programmes that would fill in outlier variances between public reports to flag up what might be a out of normal number (crude guesses as to what really looks out of line, link it back to possible rules, get sometimes a hint as to when to start reading those footnotes. ouch is that awful to do using table references, switched to Quantrix, way nicer) . .
gonna stop that drift. I agree with caveat emptor. I’d not have it any other way, and I’d never have learned except by mistakes, nota they were on my penny, not OPM, even if I recall my hand being scalded. LIke when a kiddo you boast about getting a scrape falling off your bike, because you survived, so must be a hard lad! But the vastness of the industry dedicated to obfuscating real numbers is daunting. It took off in my lifetime just something else. There was this huge move to “regulation” and reference to tomes of codified hypothetical sanctity. Give me back the straight dope any daym honesty even in dishonesty because there are fewer illusions.
Even looking at plain “governance”, a share conveys few if any rights. See rotating boards, the US equivalent to voting preferences lately switched back to voting preference, GOOG and the facebook website thing have at least gotten straight in your face as to control . . my entire drift is that we should be able to look at automated numbers now. If I can automate my tax return by pulling my transactions into a batch job to get me a picture every month, even with tolerances you as a motor engineer would faint at, they are at least guides, why should not a shareholder have access to that?
Sorry, on another drift. I believe in caveat emptor, but I worry just how many caveats we need to succour when there is little evidence of straight dealing. I do not believe any party involved in this transaction has any enviable record in managing public companies. It is an indictment of our entire society that it’s hard to think of but a few names who do have that respect.
Just too big a subject, but the people who care about this are your generation, not mine. You are the front line of these losses, despite the pitch to blame baby boomers for passing on a tainted legacy. Your money being taken. Or rather my generation I know, virtue blessings of birth, seem not to care. I got nowhere with a dear admired friend who is supposed to publicly advocate for fair pensions. My lot never had to worry, so are the wrong lot to address the issue. It is deeply upsetting to me that that cabal also encapsulates those who have the education or capability to look into the subject. Shop closed, by default, even if not by design. Personal loss is I miss my school friends, because these are divergences of thought very difficult to abridge socially.
Anyhow, also a fan of Paul Theroux. I thought Elliot’s character was rewritten in the flim, though. I also think Theroux too good at stringing vignettes and never reaching the heart or catching more than ephemera. Great stuff for a director of photography, but just never enough meat. That’s why I do like him, though, as my own impressions were very young of that world. Not going to look it up, but I think Chinese Box, with Jeremy Irons and that local girl who is still a star, was very good, might have been Theroux also, ‘least he did do a HK book.
For anyone just tuning in, the FO used to insist Noble House, Clavell, was required reading. Transparent contemporary history, by accident I met and was charmed into polite supplication by the (transformed just enough in prose) baddie in that book. Common interest, ballroom dancing, though I am two left feet, was my dad’s thing, same generation. If you fancy Piers Brosnan, who has his actorly charms (see Evelyn, which he did off his own bat) he did a really tolerable mini series of Noble House, production for HBO or some channel like that, which can be found on VHS.
bit too too early in the day for all this, rpaco, hope you and the crowd may forgive me!
– john
footnote on my comment as to generations being ripped off: if the retiree crowd have nothing to pass on, are plundered to pay for what i think of as only false debts, we ruin ourselves. It may have been a convenient policy to throw free capital at the never-capitalists of my scrounging generation, scrounging twice because they were pampered by gifts from their own hard working parents and then again by a desperate bulk vote purchases, but the destruction of society will come from taking away the ability of one’s elders, who have experience, to allocate capital. I think almost anyone my age got sold the idea that they are by default the Prodigal Son, and somehow deserving. NOT SO. The reason we attribute reason to our elders, is that despite there may be some of us who believe they are sufficiently educated to apportion resource by MBA diktat, it used to be the majority of the wealth was accrued to our parents, and whether they possessed fancy degrees or not, simple longevity of experience schooled them the practical way. By usurping this natural process, I am sorry, but no amount of PhDs will recompense for collective wisdom. We just discarded a natural governor of the pressures of society to find and use money. I speak as just one of those stupid children who thought they knew it all. My gen go on and on about IP, intellectual capital and all things which revolve around the law, and omit to observe how true human capital evolves. Because the natural inclinations of us all as we grow older become more protective. By all means, there are flaws in my argument, but I am imagining the sheer statistics of population create a bulwark against speculation, and this might warrant some better observation. I know my own parents may have had little knowledge of the economy in which I grew up, and as a boy I actually cursed them for being so dense, but they did restrain me, and not jump in. Therefore, they preserved capital to be inherited. Modest amounts, I hastily add. That said, if you take away through zero rates the very income on which your forbears live, you squander their capital, and no matter what the people selling you insurance or annuity say, it’s your parents who will always care most to save for you, because what else do they have to pass on but you? A curse on the generation who create children in hock, or rather they are a curse on all of us, and an insult to their own children. We are being societally neutered by policy designed to pander to these wastrels, every one of us, and every age of us. I think we have risked beyond quick repose, the fabric of life.
I agree re the succession issue. If it was important to Bernie he would have done something about it. The fact that he hasn’t can only mean that he doesn’t care. “Après moi, le déluge” is about it.
joe, what’s the latest on the gribowsky/german trial situation? news of that seemed to die down… and just as that might have been in the f1 news, we had the whole bahrain situation instead… not that bernie would start little fires to keep people away from the big one or anything like that…
i wonder if Rupert would like 20% of F1…….
…….well it’s a start!
Joe – as a side note, it would be interesting to see who now owns the Williams shares now that they’re listed.
According to Bloomy:
Frank owns 51.5%
Mr Wolff has 15.45%
Patrick Head owns 9.33%
The rest are mutual funds/investment houses with the exception of Nichoas Rose who owns 0.04%. The full list is:
Cyrte Investments BV – 5%
BASE Investment Sicav – 0.15%
Rafferty Asset Management LLC – 0.1%
CB-Accent Lux Sicav – 0.09%
BBK Gestion SA SGIIC/Spain – 0.05%
Hansainvest GMBH – 0.02%
Popso (Suisse) Investment Fund – 0.02%
Some of this info is from March 2011 but mostly from December. And yes, I know it doesn’t add up to 100%!
Hey Joe….you should be looking fowardcto F1′s share flotation: when it comes out buy 10 shares and then, as an official “shareholder” of F1 you’ll be asking all the questions that their current management would never answer. Questions like: how much prize money is given to the winning driver , etc.