Ferrari Can Be Sold Before Marchionne Eats a Bagel

Posted on February 12, 2015.

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But how many bagels will it take?

Taking Ferrari public will be an easy job for the banks handling the offering, said Sergio Marchionne, chief executive officer of the automaker’s parent, Fiat Chrysler Automobiles NV.

“It won’t be a difficult placement,” Marchionne said in an interview. “I wish they were all like this. The execution of this is going to be very short. We just need to be very focused on which investor base we’re going after and once we do that, you could probably sell it by the time you and I have a bagel in the morning.”

Fiat Chrysler is holding a “beauty contest” to select the underwriters and will decide in March or April, Marchionne said. An IPO of the maker of the exotic sports-cars is possible by July and the process should be quick, he said.

Fiat Chrysler shares rose 2.9 percent to $13.69 at 11:52 a.m. New York time. The stock had risen 15 percent this year before today.

Maximizing the value of Ferrari is a key part of Marchionne’s plan to pay for a 48 billion-euro ($54 billion) investment project to increase Fiat Chrysler deliveries to 7 million cars by 2018 from 4.6 million cars last year. Spinning off a 10 percent stake in Ferrari this year is part of the automaker’s plan to raise $5 billion.

Luxury-product companies such as Prada SpA and Hermes International SCA trade at more than 20 times earnings, while automakers are generally less than half that.

“You’ve got to be careful because everyone has a vested interest to give me a number that will make me feel better,” Marchionne said. “But at the end of the day, the reality is when the rubber meets the road when you go public. So I think they are being sufficiently coy in giving us a wide range of values. The market will call it.”

Europe Losses

Fiat Chrysler, which has relied on North American operations to overcome losses in Europe, turned a profit in its home region in the fourth quarter for the first time since 2007. Marchionne has said that all regions should be profitable this year.

The London-based automaker rose 2.8 percent to $13.68 in New York. The stock has climbed 15 percent this year through yesterday, valuing the company at $17 billion.

After listing 10 percent of Ferrari in the U.S., Fiat Chrysler will distribute its remaining 80 percent holding in the division to its own shareholders. Ferrari Vice Chairman Piero Ferrari owns the remaining 10 percent of the company.

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