For a while now, people have known that Ferrari as a brand and as a manufacturer were to float on the stock exchange. When it comes to stocks, car makers tend not to do as well as many other brands such as Apple or Twitter, but this is where Ferrari has pulled a few tricks out of the bag.
Ferrari is a luxury car manufacturer, based in Maranello, Italy, partly owned by parent company Fiat Chrysler Automobiles (FCA) which is doing its best to reduce its 8.6 billion euro debt. FCA Global headquarters are based in London after the group was merged into a Netherlands based holding company and then listed on the New York Stock Exchange. Confusing right?
FCA want to offer Ferrari as a separate entity by presenting an initial public offering (IPO) on the New York Stock Exchange in the coming days. What is interesting here is that Ferrari won’t be listed as a car manufacturer but as a maker of luxury goods. With cars ranging from £150,000 up to a £1 million they clearly can be considered as luxury goods. This allows Sergio Marchionne, Chief Executive to value Ferrari in the region of 10 billion euros.
When the brand is submitted only 10% will be offered for public sale. 10% of the shares are to be held by Enzo Ferrari’s son Piero with the remaining 80% distributed among FCA shareholders. This doesn’t mean that if you had to buy shares in FCA today, you will be entitled to Ferrari shares. The initial listing includes a loyalty scheme whereby long-term investors in FCA such as Piero Ferrari and EXOR, FCA’s investment company will hold greater voting power, around 45% of Ferrari’s voting shares.
This isn’t the first we have heard of FCA spinning off companies as separate entities. Magneti Marelli, Italian parts giant has been tipped to be sold for around 2.7 billion euros with rumours that it was going to be added to sweeten a deal for Audi to purchase Alfa Romeo.