Ferrari Climbs in U.S. Debut After IPO Prices at High End

Updated on
  • Supecar-maker listing marks first step in Fiat spinoff plans
  • Agnelli family, Piero Ferrari to join forces to secure control

Can Ferrari Save the IPO Market?

Ferrari NV climbed 5.8 percent in its first day of trading, marking a successful step in Fiat Chrysler Automobiles NV’s plans to spin off the supercar maker to finance expansion plans.

Shares in the maker of the $240,000 458 Italia sports car closed at $55 in New York, giving the company a market value of about $10.4 billion. Earlier, they rose as much as 17 percent. The stock priced at $52 in its IPO, the top end of the marketed range. Fiat Chrysler kept demand high by limiting the public listing of the car brand to no more than 10 percent of the unit.

The interest in Ferrari comes as investors have shied away from other IPOs. Three U.S. offerings faltered within about a week this month, as Digicel Group Ltd. canceled a sale, First Data Corp. priced shares below a marketed range and Albertsons Cos. postponed its offering.

Ferrari’s share sale, which has been in the works for about a year, is critical to help Fiat Chrysler finance a 48 billion-euro ($54 billion) investment program focused on expanding the Jeep, Alfa Romeo and Maserati nameplates globally. Ferrari Chairman Sergio Marchionne, also chief executive officer of Fiat Chrysler, has taken both companies’ stories on the road in London, New York and Ferrari’s home in Maranello, Italy.

Agnelli Control

The public listing will raise more than $4 billion for Fiat Chrysler, thanks to additional cash the Italian-American manufacturer will squeeze out of Ferrari before spinning it off completely early next year. Fiat Chrysler plans to distribute its remaining 80 percent of Ferrari to its own investors early next year.

Piero Ferrari, the son of the brand’s founder, will retain his 10 percent stake and becomes a billionaire from the deal. Following the spinoff, the Agnelli family will be the biggest shareholder and control more than 30 percent of the supercar maker’s voting rights, thanks to a loyalty shareholder program put in place by Marchionne.

John Elkann, a descendant of Fiat founder Giovanni Agnelli and the head of the family’s business activities, said in an interview with Bloomberg after the start of trading that the Agnellis will to retain their holding and work closely with Piero Ferrari. That means control of the company is locked up even before Ferrari becomes completely independent from its long-time parent.