LONDON - Formula One chief Bernie Ecclestone said on Wednesday he had recommended Singapore as the best place to float the motor racing business, seeking to tap Asian enthusiasm for international sporting brands.
Ecclestone, 81, stressed that he made the proposal, but a decision on any flotation was up to CVC Capital Partners, the private equity company that has owned a majority of the business since 2006.
English soccer champions Manchester United also had plans for a US$1 billion (S$1.26 billion) flotation in the southeast Asian city state last year but put them on ice because of market volatility.
The diminutive Ecclestone, a former driver and team boss, has built Formula One (F1) - and with it his estimated US$4.2 billion fortune - from a circuit for motoring enthusiasts into a global enterprise that draws more than half a billion TV viewers for its races.
It is banking on further geographical spread to keep its revenues growing, with a return to the United States later this year for a Grand Prix in Texas, after last year's inaugural race in India, and Russia joins the calendar in 2014. It will also race in Bahrain this year, despite continuing unrest, after last year's contest was shelved following a bloody crackdown on pro-democracy protests.
A flotation for F1 has long been mooted, but the issue is made more urgent by the expiry this year of a confidential commercial agreement between the rights holding company and the teams whose cars compete in the 20-race series.
Ecclestone said the flotation plan was not linked to the agreement with the teams and denied reports that Italy's Ferrari, the sport's best known team, and current champions Red Bull could be offered a stake in the business.
CVC, which owns 63.4 per cent of F1, would continue to be a long-term holder of the business, and the initial public offering (IPO) option being explored is for only part of the company, a source close to the matter said.
Britain's Sky News has reported that CVC has asked Goldman Sachs to examine a placement of some F1 shares with a new investor as a precursor to a formal Singapore IPO.
The Sky report put a potential valuation of over US$10 billion on the business. Goldman Sachs and CVC declined to comment.
A minimum 15 per cent float in Singapore would make the deal worth US$1.5 billion.
Sources have told Reuters that Manchester United has not abandoned its plan to list in Singapore but that no decision has been made on the timing.
United has a global fan base estimated at 333 million, including many in Asia who follow the sport via live television.
Among F1 teams, only Williams has floated so far, with their shares listed in Frankfurt since last March. Ferrari president Luca Di Montezemolo said last year that the company had no plans to list but might reconsider in a few years' time.
Singapore, which competes with Hong Kong for international listings, became the venue for the world's first night-time Grand Prix in 2008.
Investor reaction to such a listing could be difficult to gauge as there was plenty of scepticism around Manchester United's business and profitability when the club was preparing for a public float last year.
"The same thing will apply to F1. At the end of the day it depends on their profitability and whether they can generate returns for shareholders," said Ng Kian Teck, lead analyst at SIAS Research in Singapore.
"But F1 has good branding and strong market share, and they are probably one of the few players that could do racing events to their kind of scale. That would probably put them on a better foothold compared to Man U."
The F1 series had annual sales of 1.17 billion euros (S$1.96 billion) and employs 200 people, according to the CVC website.
F1's revenue for the current season, which began at the Australian Grand Prix on Sunday, will reach US$2 billion for the first time, said industry monitor Formula Money.
In a recent report, Formula Money added that new races in the United States and Russia would help boost income from F1's commercial rights by almost 50 per cent to US$2.9 billion by 2015.