Sergio Marchionne, the chief executive officer of the supercar manufacturer’s parent – Fiat Chrysler Automobiles – announced the company has initiated a “beauty contest” that would select the banks in charge of Ferrari’s initial public offering.
Fiat Chrysler is ready to select the underwriters for the IPO by March or April, commented the top executive during an interview in New York. “It won’t be a difficult placement,” Marchionne said. “I wish they were all like this. The execution of this is going to be very short. We just need to be very focused on which investor base we’re going after.” The Ferrari IPO could be viable by July. Fiat Chrysler announced last year it would move to spin off Ferrari as an independent company, with around 10 percent of shares offered to investors via the approaching public offering and the rest divided among existing FCA stakeholders. Lifting the value of Ferrari could prove crucial step in the CEO’s drive to invest 48 billion euro ($54 billion) in the world’s seventh-largest automaker in order to grow deliveries to 7 million cars by 2018.
Usually, luxury-product companies – and Ferrari has been hard at work positioning itself in that range – have been trading at more than 20 times earnings, while mass-market carmakers usually don’t achieve even half of the figure. Fiat Chrysler last year managed to sell 4.6 million vehicles and the Ferrari IPO is part of a strategy to raise this year around $5 billion. FCA has relied so far on its surging North American business to overcome continued losses in Europe and some emerging markets, but during the fourth quarter last year managed to return to positive results for the first time since 2007. Additionally, Marchionne, which is also Ferrari’s chairman following the departure of long-time executive Luca din Montezemolo, forecasted that all regions should be profitable this year for FCA.
Via Automotive News Europe