Ferrari sets $1 billion IPO; Ticker symbol? RACE
That figure represents about 9 percent of Ferrari’s common shares, which FCA is selling in the process of separating the Ferrari business unit from the rest of Fiat Chrysler Automobiles. The automaker will use the proceeds of the public stock offering to help fund an ambitious $55-billion, five-year expansion plan.
A successful IPO would be particularly important for Marchionne as his attempts to merge FCA with USA rival General Motors to share costs of developing cleaner and more “intelligent” vehicles have fallen on deaf ears.
Considering the 9 percent stake in Ferrari that is being listed, the Italian supercar manufacturer could be valued at $9.82 billion, depending on how the market responds. Including net debt, Ferrari’s enterprise value is seen at up to $12 billion. According to the early prospectus circulated, the company will be listed on the New York Stock Exchange (NYSE) under the RACE ticker. Ferrari reported a boost in sales past year at 2.8 billion euros ($3.3 billion), which resulted in a profit of 256 million euros ($302 million), according to CNN Money. The Ferrari family members has the staying 10 %.
After seeing a 10% float in the share capital, Fiat Chrysler is going to retain almost an 80% share, which it mentioned that it was intending to distribute in its own shareholders in the beginning of 2016. While Ferrari has kept its production numbers on its cars purposely low, its prancing horse logo has created a merchandise goldmine. Apart from the IPO, Ferrari is expected to lighten its parent company’s debt load too, indicated the filing. Initial requests for Ferrari shares may exceed the amount available by more than 10 times, one of the people said.
But for investors, the big question around Ferrari has been this: Given that the company limits its own production to preserve exclusivity, how will it generate earnings growth over time?
UAW President Dennis Williams, who was embarrassed by the rejection of the first tentative agreement, says the union has won several important changes that should make the new deal more palatable to FCA’s blue-collar employees.
UBS is the offer’s global coordinator, with BofA Merrill Lynch, Allen & Company, Banco Santander, BNP Paribas, J.P. Morgan and Mediobanca acting as joint bookrunners.