Ferrari valued at up to $9.8 billion in U.S. initial public offer

Sat Oct 10, 2015 6:59am EDT
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MILAN (Reuters) - Italian luxury carmaker Ferrari expects its U.S. initial public offering to be priced in a range of between $48 and $52 per share, which could value the company at up to $9.8 billion, it said.

Parent Fiat Chrysler Automobiles (FCA) (FCHA.MI: Quote) (FCAU.N: Quote) will sell up to 10 percent of Ferrari in the IPO and will use proceeds to help pay for its own ambitious turnaround plan to boost global sales to 7 million cars by 2018, and compete with rivals such as BMW and Volkswagen.

The price range, announced in the IPO prospectus on Friday, may satisfy FCA Chief Executive and Ferrari Chairman Sergio Marchionne, who has said Ferrari was worth at least 10 billion euros ($11.4 bln). Some analysts had said it could be just over half that.

A successful IPO would be particularly important for Marchionne as his attempts to merge FCA with U.S. rival General Motors (GM.N: Quote) to share costs of developing cleaner and more "intelligent" vehicles have fallen on deaf ears.

In the prospectus filed with the U.S. market regulator, Ferrari said it would offer 17.2 million shares in the IPO, equal to around a 9 percent stake in the sportscar maker. An additional 1.7 million shares may be sold if the greenshoe option is exercised, it added, raising the size of the total offering to a 10 percent stake.

FCA could raise up to $982 million through the offering.

Ferrari, famous for luxury vehicles adorned with its "prancing horse" logo and its Formula One racing team, expects to list on the New York Stock Exchange under the symbol "RACE". Its Wall Street debut is expected in the second half of October, while FCA plans to spin off the whole of Ferrari next year.

Marchionne wants Ferrari to be priced as a high-flying luxury goods stock, but analysts have questioned whether the capital intensive business deserves the multiples enjoyed by the likes of Prada (1913.HK: Quote) and Hermes (HRMS.PA: Quote).

FCA will see its 90 percent stake in Ferrari reduced to 80 percent after the IPO and it plans to distribute that 80 percent stake to its own shareholders next year.   Continued...

A logo is seen on a  Ferrari Berlinette car displayed on media day at the Paris Mondial de l'Automobile, September 28, 2012.  REUTERS/Christian Hartmann