Pirelli to sell 40% IPO stake as it returns to Milan stock exchange

September 6, 2017

PirelliItalian tyremaker Pirelli will be selling up to 40% of its equity capital in an initial public offering (IPO) as the company prepares to return to the Milan stock exchange in October.

Pirelli was acquired by state-owned China National Chemical (ChemChina) two years ago.

The relisting of the world’s fifth-largest tyremaker will test demand for a streamlined firm that focuses on high-end consumer tyres, after the company’s less profitable truck and industrial tyre business was folded into a unit of ChemChina.

A confidential study prepared by analysts at Banca IMI, one of the global coordinators for the IPO, valued the group’s equity at between EUR7.6 billion and EUR8.7 billion (US$9 billion -US$10.4 billion).

Pirelli – which back then included the industrial tyre business – had a market capitalisation of around EUR7.3 billion when it was delisted in November 2015 following ChemChina’s takeover. One of Italy’s best-known brands, it had traded on the Milan exchange since 1922.

“Pirelli’s superior financial profile and higher expected earnings growth justify a premium versus Tier1 players,” the Banca IMI study said.

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