Probably the most iconic automotive brand in the world – Ferrari – will try to also set itself as one of the most valuable as it joins the public pack on the New York Stock Exchange.
In order to better understand what are the implications of Fiat Chrysler Automobiles NV’s decision to spin off Ferrari into an independent entity and offer up to 10 percent of the ultra-luxury sports car manufacturer later this month on Wall Street, we gathered some of the facts of the initial public offering. FCA has decided to sell up to 10 percent of Ferrari (the rest will be divided among FCA investors) at a range of $48-$52 a share, with a market cap value of no more than $9.8 billion – and with net debt the enterprise value of the “prancing horse” reaches up to $12 billion. The windfall for the parent company would be of up to $982 million through the IPO, but the Italian-American automaker actually stands to gain around $4.2 billion from all the associated proceeds.
The funds would be reinvested into FCA’s highly zealous 48 billion euro investment strategy that seeks to lift group sales to 7 million units by 2018. FCA has decided that another Dutch-registered holding company is in order for Ferrari – the Wall Street listing is happening this month and the spin off should be complete early next year. A secondary Milan listing could be called at a later date. FCA actually owns 90 percent of Ferrari, with 10 percent reserved to Piero Ferrari, vice chairman and son of the founder Enzo. A loyalty share ownership scheme included in the float would also reward long-term investors, allowing for enhanced control to be leveraged by Fiat’s founding Agnelli family.