The improbable rumor of a takeover of F1 by American and Qatari funds

CVC accomplished the most significant financial transaction in its history by purchasing F1. Currently, its return on investment is estimated to be between 400 and 500%, which is almost unparalleled at such a scale.

Nevertheless, an investment fund is intended to enter and exit the capital of companies in order to maximize the funds entrusted to it by its clients. The sale of the F1 shares has therefore been considered for many years already. An initial exit took place in 2012 with the sale of a 21% block to three other funds, Waddell & Reed Financial, Norges Bank Investment Management, and BlackRock, for $1.6 billion.

But today, the Financial Times is now asserting that RSE Ventures and the Qatari fund have teamed up to make a bid to buy the remaining 35% held by CVC Capital. The newspaper claims that the negotiations would involve a transaction estimated between 7 and 8 billion dollars.

Such an amount certainly raises questions: indeed, if the 35% stake of CVC is estimated at eight billion dollars, then the total valuation of the sport reaches 22 billion dollars. However, for the record, when CVC was attempting to list the sport on the Singapore Stock Exchange, the valuation was close to 10 billion dollars, which is in line with the 2012 transaction.

It seems very unlikely that the recent news surrounding F1 (decrease in television audiences and the number of teams present, Bernie Ecclestone’s legal troubles…) has allowed for a doubling of an already very high valuation.

The probability of such an offer materializing is further decreased by the fact that the article cites Bernie Ecclestone, who states that he would add his shares (5% of the capital) to those of CVC in the event of a sale. However, F1 observers are well aware that the F1 magnate is known for declaring the exact opposite of his intentions in the press.

Moreover, it is interesting to note who the highlighted candidates are. We find Stephen Ross, the owner of the Miami Dolphins, and the Qatar fund, already the owner of PSG. The idea is that such an association would allow F1 to finally break through in the United States while Qatar would redeem its image after the FIFA scandal and the awarding of the 2022 World Cup.

The intention to buy Silverstone had already been attributed to Qatar, but ultimately, it was the British Telecom pension fund that signed a very long-term contract to ensure the commercial development of the British circuit. Similarly, Williams has long tried to attract sponsors from the emirate, even going as far as opening a technical center there. But after years of waiting, the team wrote off this investment as a loss. Finally, discussions about a Grand Prix have been ongoing for years without coming to fruition…

The release of such a story thus seems to indicate that there are indeed discussions about the F1’s capital, but that there is certainly another candidate with whom the discussions are much more advanced, although the transaction amount is considerably lower than reported.

With the participation of www.Racingbusiness.fr