A group led by Pirelli & C SpA (PC) Chairman Marco Tronchetti Provera won backing from Intesa Sanpaolo SpA (ISP), UniCredit SpA (UCG) and Clessidra SGR to gain more direct control of Europe’s third-largest tiremaker, resolving a shareholder dispute.
Malacalza Investimenti, which was seeking to exit its holding, agreed to sell its 12 percent stake in Pirelli’s largest shareholder Cam Finanziaria SpA (CMF) and its 31 percent stake in the company controlling Camfin for a total 160 million euros ($209 million), according to an e-mailed statement. Newly created Lauro Sessantuno, backed by Tronchetti, will seek to buy out all Camfin stock, which has a market value of 622 million euros, according to a statement.
The new holding structure ends a strategy dispute with Malacalza, which was hanging over Pirelli as it pushed sales of high-end tires to offset weak auto demand in Europe. Pirelli’s first-quarter earnings before interest and taxes fell 16 percent to 179.8 million euros as revenue declined 1.3 percent.
Lauro Sessantuno will own 60.99 percent of Camfin after the contribution of Tronchetti’s shares and will bid for the rest of Camfin stock at 80 euro cents each, the investors said in the statement. Following the bid, the investors intend to delist Camfin.
Camfin fell as much as 9.7 percent to 77.3 cents in Milan, and was down 7.4 percent as of 3:05 p.m. Pirelli was little changed at 8.92 euros.
As part of the deal, Malacalza agreed to end legal challenges over Tronchetti’s holdings, according to the statement. Separately, Malacalza also bought a 7 percent stake in Pirelli at 7.8 euros per share, according to the statement.
Private equity fund Clessidra will invest as much as 150 million euros in case of a successful bid for Camfin. UniCredit and Intesa are set to spend as much as 115 million euros each, according to the statement.
The investors support Tronchetti’s management role at Pirelli and agreed to bind their stakes in a shareholder pact for four years.
Tronchetti controls Milan-based Pirelli through Camfin, supported by an agreement with other investors including Mediobanca SpA (MB), Italy’s biggest publicly traded investment bank. The investors pooled their shares totaling 32 percent of Pirelli in a shareholder agreement, which was revised after today’s transaction, according to a Pirelli statement today.
UBS advised Malacalza, while Banca IMI, Lazard, Rothschild and UniCredit advised the bidding group.