Ferrari lines up luxury pit stops on high-octane roadshow

Nicole Bullock and Andy Sharman
A gold Ferrari drives through the Knightsbridge section of London, Aug. 8, 2014.
Getty Images

Ferrari will pull into some of the western world's wealthiest pit stops in the coming week, on an initial public offering roadshow aimed at securing a market valuation of $10 billion for the Italian supercar maker.

The group, which is being spun out of Fiat Chrysler, on Friday shrugged off a flap with its banker over unguarded pre-listing comments to launch its listing of 9 per cent of its equity, or almost 17.2 million shares.

At the top of its planned price range of $48-$52 per share, the IPO would raise $894 million and value Ferrari at $9.8 billion.

Before the shares price on October 20 and trading begins on the New York Stock Exchange under the ticker RACE, however, Ferrari's management and bankers have planned a marketing blitz designed to appeal to potential Ferrari drivers as much as likely investors.

Executives and advisors will launch the tour on Monday with a luncheon in the rooftop ballroom of the St Regis Hotel off New York's Fifth Avenue, signalling bankers' efforts to pitch Ferrari not as an ordinary carmaker but being "an iconic brand with superior, enduring power", in the words of Friday's filing.

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The roadshow will speed through Baltimore and Boston before another lunch on Thursday at the Dorchester Hotel, set between rival fast car showrooms on London's Park Lane.

On Friday, investors have been invited for one-on-one meetings at Maranello, the Italian headquarters and racetrack Enzo Ferrari established in 1943, whose factory Ferrari describes in its listing documents as "the core of our client engagement strategy". Executives and advisers will then fly to the west coast before returning to New York.

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The management team will be led by Sergio Marchionne, chairman of Ferrari and chief executive of Fiat Chrysler. Advisers include UBS, Bank of America Merrill Lynch, Allen & Company, Banco Santander, BNP Paribas, JPMorgan, and Mediobanca.

Behind the glitz expected for the listing day itself, Ferrari's high-profile IPO will have to test both a choppy US stock market and new volatility around automotive shares after Volkswagen's admissions that it cheated on emissions tests.

The pricing of the offering — the first of a series of planned transactions to separate Ferrari from its parent company — matters to Fiat Chrysler as the proceeds will be used to reduce its debt burden. The group reported net debt of €10.8 billion at June 30, stemming from Fiat's acquisition of Chrysler and its exposure to lossmaking European operations.

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Friday's filing came after the company was forced to address comments by Sergio Ermotti, chief executive of UBS, the lead bank on the IPO. On the sidelines of an event in Milan, Mr Ermotti said the listing marked "un grande momento" for Ferrari, and that it was "almost impossible to think that [the] Ferrari IPO can't be successful".

The US has strict rules about what can be said by those involved with an IPO in the run up to the deal. An SEC filing after Mr Ermotti's remarks said he meant only to refer to the completion of the IPO being significant for the company.

UBS has not commented, pointing to the filing as containing all the relevant information.

Ferrari, which has historically capped its annual sales to preserve exclusivity, shipped about 7,250 cars last year, generated €2.8 billion in revenues and earnings before interest and tax of €389 million.