Italian 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.