Always wanted to own a Ferrari but found it to be a little out of reach? Good news, then, as the iconic Italian sports car maker has filed its request for an initial public offering of its common stock meaning millions of Americans will shortly be able to own a piece of the most storied car company in the world.
In a request to U.S. regulators on Thursday by parent company Fiat Chrysler Automobiles (FCA), an initial public offering of Ferrari will occur during the last quarter of this year, likely on the New York Stock Exchange.
In a statement made last year, FCA plans to sell up to 10 percent of Ferrari by way of share offering or selling the shares by way of common stock and distributing the remainder to the company’s shareholders.
The listing is an attempt to assist FCA, a company that possesses one of the largest mountains of debt for the industry, pay for an investment plan estimated to cost $53 billion, assist in increasing sales by 60 percent or 7 million cars by 2018, and increase the company’s overall net profit by five-fold.
FCA currently owns 90 percent of Ferrari, with Piero Ferrari holding the remaining 10 percent ownership.
The initial public offering (IPO) is being underwritten by Santander, BofA Merrill Lynch and UBS, according to the company’s filing on Thursday with the U.S. Securities and Exchange Commission.
The IPO is planned for after mid-October. The filing did not mention the amount of shares being sold by the company or their anticipated price, only specifying that it was not listing more than 10 percent of the business.
Sergio Marchionne, FCA Chief Executive and Ferrari Chairman stated that he felt that Ferrari was worth at least $11 billion and needs to be priced as a luxury goods stock. Brokers value the company between $6 and $11 billion.
It is important for the IPO to be a success because it will assist Marchionne’s quest for a partner to merge with, helping with the decreasing margins and increase in development costs.
Marchionne attempted a tie-up with his counterpart at U.S. rival General Motors earlier this year but was rejected.
Analysts are saying that the separation from Ferrari should allow for an easier preparation of FCA in a merger because it will give a more clear value of the company.
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