Current Issue

PREMIUM CONTENT FOR SUBSCRIBERS ONLY

Retail

Pirelli looks at selling 39% of its tire subsidiary

Order Reprints

When asked on Wednesday about selling a minority interest in its tire subsidiary, a Pirelli & Cie SpA spokesperson would only say the company was evaluating "an enhancement of its holding, as an alternative to intial public offering." One day later, the company gave the go ahead to find a buyer for 39% of Pirelli Tyre SpA.

In its preliminary financial results for the first half of 2006, Pirelli's comments on what it calls a "private placement" are as follows:

"The board of directors examined an operation with a number of primary Italian and international financial institutions (Banca Intesa, Banca Leonardo Group, Capitalia, One Equity Partners-JP Morgan, Lehman Brothers and Mediobanca) which entails the disposal of a minority stake in the capital of Pirelli Tyre SpA aimed at subsequent initial public offering.

"The operation, for which the definition of organizational structures and other aspects are still underway, entails the disposal of 39% of the capital of Pirelli Tyre SpA for a consideration of 740 million euros -- which corresponds to an equity value for the entire 'Company' of approximately 1.9 billion euros -- with the simultaneous underwriting of agreements between seller and buyer aimed at ensuring the latter obtain representation in 'Company' organs, as well as regulating the mode of transfer of the stake up to the subsequent IPO.

"The board of directors approved the operation mandating the chairman and chief executive to define the relative agreements -- as well as the main one regarding the disposal -- in their respective details, confirming a similar decision by Pirelli Tyre Holding N.V., the company which holds 100% of Pirelli Tyre SpA.

"The specific contents of the agreements will be quickly announced to the market at the moment of their definition."

Pirelli & Cie SpA was preparing an initial public stock offering for its Pirelli Tyre unit last month. However, the global offering was withdrawn on June 30 "due to the negative performance of markets."

Related Articles

Pirelli SpA is interested in selling off its truck tire division

Pirelli parent looks for more profitability from its tire division

DENSO subsidiary celebrates the grand opening of its newest plant

You must login or register in order to post a comment.