British tycoon Mr Bernie Ecclestone raised $1.4 billion (€1.34 billion) in the Eurobond market yesterday, paving the way for a stock market flotation of his Formula One motor racing empire.
Mr Ecclestone is chief executive officer of Formula One Holdings, which owns exclusive commercial and broadcasting rights to international motor sports. The bond is backed by future revenues from those rights.
"Now that we have successfully completed this transaction, we look forward to the future stock market flotation of this business," Mr Ecclestone said in a statement. He did not give any indication of when the company might be floated. Sources at US investment bank Morgan Stanley, which acts as Mr Ecclestone's financial adviser, said only that the listing was likely to take place "within the next few years".
Mr Ecclestone's path to the market has had more twists than a Grand Prix circuit.
Plans to float Formula One were first unveiled some years ago, but a $3.0 billion initial public offering (IPO) slated for summer 1997 had to be cancelled after the European Commission launched a competitions investigation into Mr Ecclestone's stranglehold on international motor sport.
The probe, which is still to be completed, also undermined initial efforts to sell the bond, which was mandated to Morgan Stanley last September.
Originally planned as a $2.0 billion transaction, the deal had to be radically restructured after a series of investor meetings addressed by Mr Ecclestone himself in November failed to drum up sufficient demand. The resultant welter of bad publicity infuriated Morgan Stanley, which stonewalled further enquiries about the deal.
WestLB underwrote around half of yesterday's deal, but bankers said it was not the sole investor although it had bought a substantial chunk. Morgan Stanley also bought some, with the remainder selling to European banks, the traditional audience for floating-rate paper.
Mr Ecclestone plans to increase the deal to $2.0 billion at a later date provided its rating will not be affected, sources close to the deal said.
