Expect Ferrari IPO To Value At Top Of Range $11-B+

Expect Ferrari IPO To Value At Top Of Range $11-B+

$FCAU, $FRRI, $UBS, $JPM

Ferrari SpA’s ability to sell supercars at high prices has carried over to the company’s IPO (initial public offering) on NYSE this month.

Based on talks with potential investors, Ferrari is on track to garner the $11.2-B value that Chairman Sergio Marchionne sought.

Initial requests for the stock will likely exceed the amount available by more than 10X.

Mr. Marchionne, who is CEO of Ferrari parent company Fiat Chrysler Automobiles NV (NYSE:FCAU), has insisted for months that the brand should be valued as a luxury-goods maker, such as clothiers Prada SpA or Hermes International SCA, and not as an auto manufacturer.

Those companies trade at over 20X earnings, more than 2X the average valuation of carmakers. Ferrari is working out details of its debut on the New York Stock Exchange in mid to late October as planned. A price range has not been set yet.

Preliminary talks show the 10% Ferrari stake Fiat Chrysler is putting on the market in the IPO could be valued at about EUR1-B. About 50% the full business’s expected EUR10 -B value is based on the strength of its brand, which is #1 in the World.

Ferrari will be listed in New York under the ticker FRRI, will be fully separated from Fiat Chrysler at the beginning of next year as the London-based parent company distributes its remaining 80% to shareholders. Vice Chairman Piero Ferrari, the Son of founder Enzo Ferrari, will keep his 10% holding.

UBS AG, Bank of America Corp.’s Merrill Lynch, Banco Santander SA, Mediobanca SpA and JPMorgan Chase & Co. are advising on the IPO.

Ferrari CEO Amedeo Felisa said this month that the maker of the EUR 235,000 488 Spider convertible will avoid adding models, such as battery-powered vehicles, outside its traditional sports cars because its customers prefer powerful autos with a traditional engine “growl.”

Stay tuned…

HeffX-LTN

Paul Ebeling

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