The tire manufacturer Pirelli, has lifted the veil on Monday on the conditions of his return, long-awaited, on the Milan Stock Exchange.
Neither more nor less than the biggest stock market operation of the year 2017. On October 4, the Italian tire maker, Pirelli, will make its big return on the markets with the IPO Pirelli. A “comeback” faster than expected concerning the timetable which provided for a return to Milan at the earliest by 2019. A “renaissance” on the stock market for the tire firm that had been withdrawn from the list in 2015, following its takeover by China National Chemical Corporation (ChemChina), via Marco Polo Industrial Holding. Nevertheless, it is not the “totality” of Pirelli’s activities that will regain the joys – and sometimes especially the pangs of the Milan Stock Exchange. The “Pirelli New Look” will only list its consumer tire division in Milan, while the industrial tires business will be integrated with that of Aeolus Tire, a company listed on the Shanghai Stock Exchange.
By registering a turnover of 4.97 billion euros in 2016 and expecting an average annual sales growth of 9% or more by 2020, Pirelli seems to have returned to the race (read also Pirelli reports growth ahead of IPO and Pirelli Reportedly Racing to Milan IPO Valued at Nearly $11 Billion to know more about that). To the delight of its executive vice president and general manager, Marco Tronchetti Provera who praises the “cure of youth.” “Pirelli is a 145-year-old start-up,” said the executive, without a blow, saying the company has both the agility of a young shoot and the size of a large group. The best of both worlds, in short. The start of the IPO was also given this morning and will run until 28 September. In detail, Pirelli has indicated its intention to issue up to 350 million shares in an indicative price range of € 6.30 to € 8.30 per share, which would, between 6.3 and 8.3 billion euros. Also, Pirelli may issue an additional 50 million shares under an over-allotment option. If this is the case, the total participation in the market would be 40% of the capital.
Europe’s largest IPO of the year
A valuation that has elicited a lot of comments in the analyst community. Thus, according to estimates published by Banca IMI, one of the IPO leaders, and relayed by Reuters, the price range represents 11.3 to 14.9 times the estimated profit of Pirelli 2018 of competitors Michelin and Continental – of the order of 11 – but lower than that of the Finnish Nokian, whose high-end winter tires and the positive financial situation ensure a high ratio of 15.7.
As mentioned in the preamble, the Italian group, however, should not, on the occasion of its IPO, see its historical shareholders balance their respective holdings. “No one is in a hurry to sell,” said Marco Tronchetti Provera, managing director of Pirelli, but also at the head of the holding company CamFin, which, together with the banks UniCredit and Intesa Sanpaolo, still owns 22% of the group’s capital. tires. A proportion that should “go down”, depending on the over-allotment option going back down to 10-12%. A similar fortune is also awaiting ChemChina, which currently holds 65% of Pirelli’s sole shareholder, the Marco Polo investment fund, and will thus reduce its stake in a range of 45% to 46.7%.
According to a source close to the case, more than 700 potential investors in Europe, the United Kingdom, and the United States have already expressed interest in the public offering, which was nine Italian and foreign banks supervised by Banca IMI, JP Morgan and Morgan Stanley as global coordinators. Once this task was accomplished and the company got back on track, Marco Tronchetti Provera could be tempted to pass the hand, some even evoking the 2020 deadline.