Piero Lardi Ferrari To Become A Billionaire

Posted on October 15, 2015.

The following article appeared on the Forbes website:

pieroAfter a tumultuous history that saw the illegitimate son of founder Enzo Ferrari become the company’s sole heir, the world’s most famous race car manufacturer will finally mint its first billionaire. Once the storied automaker begins trading next week at the NYSE, Piero Lardi Ferrari will probably see his net worth balloon past the billion-dollar mark, as the company his father built more than 8 decades ago is expected to fetch a valuation north of $9 billion. It all comes down to the strength of the IPO market.

Ferrari’s race to the top wasn’t easy, facing all sorts of obstacles from the onset of World War I, the harsh criticism of the press as superstar Italian drivers and spectators died in spectacular crashes during the 1950s and ’60s, to the passing of its legendary founder in the late-1980s. The Prancing Horse—as Ferrari is known to motorsports enthusiasts—carried on, though, and today has established itself as the “epitome of performance, luxury and styling” with 23% of the global top-tier car market and revenues of $3.14 billion despite restricted supply.

Piero Lardi Ferrari has been Ferrari’s vice chairman since 1988, when his father died, and retains approximately 10% of the company. The other 90% is controlled by Fiat Chrysler Group (FCA), which will spin-off the luxury carmaker through New Business Netherlands, which will be renamed Ferrari and is set to begin trading on October 21. FCA will sell 17,175,000 shares (or about 9%), while underwriters (led by UBS and Bank of America Merrill Lynch) have the option to sell an additional 1,717,150 shares. At a range of $48 to $52 per share, Ferrari could fetch nearly a billion dollars as it market capitalization is expected to top $9.1 billion. Piero’s 18,892,160 common shares, or about 10%, would be worth at least $906.8 million if the investment bankers timed the IPO market correctly.

In addition to his 10% stake, which he isn’t expected to sell and is subject to a 90-day lockup period, Piero cashed out in May 2013, when FCA restructured the company and gave him a lump sum of €280 million in cash. Taking into account market and currency movements, Forbes estimates that’s worth some $360 million today. That would put Enzo Ferrari’s only living son at $1.27 billion. According to the IPO documents, Piero could take part of a loyalty share program that would increase his stake to 10.5%, while his voting power would be fixed at 15.3%. Forbes reached out to FCA and Ferrari but didn’t get an initial response on Piero Lardi’s net worth.

Piero has a few other assets to his name. He and his two children own HPE-COXA, which provides engineering services to automakers (including Ferrari and their Formula 1 team), aerospace, and defense manufacturers; the company had $10.8 million in 2014 revenue according to Orbis. Piero also retains a 1.95% stake in Piaggio Aero, one of Italy’s prime aerospace companies and the first European firm to develop an unmanned aerial vehicle (ie. drone). Ferrari teamed up with Jose di Mase in 1998 to acquire the aerospace assets of Rinaldo Piaggio SpA (known for its Vespa scooters), selling a 35% stake to Abu Dhabi sovereign wealth fund Mubadala in 2006 for an undisclosed sum. In 2013, Mubadala joined Indian conglomerate Tata, sinking another €190 million in equity to raise their stake in Piaggio Aero to 98.05%.

Enzo Ferrari remains a legendary figure in the world of motorsports, but it took many years for Piero to earn the respect of his peers. Enzo was grooming his son Alfredo to succeed him, but Dino—as he was called—died at 24 of muscular dystrophy. Piero was the fruit of Enzo’s longtime affair with Lina Lardi. He was banned by his father from becoming racecar driver, and got his first job at the company in 1966, working on the production of the Dino 206 Competizione. He worked in various motorsports divisions until 1988, when his father passed away at the age of 90. By then, the Agnelli family, which acquired a 50% stake in the company through Fiat in 1969, increased its position to 90%, leaving Piero, now appointed vice chairman, with the remaining 10%.

Today, Piero Ferrari plays a more institutional role as the public face of the company that is currently run by Sergio Marchionne, FCA chairman and CEO. He’s also very passionate about luxury yachts, and sits on the board of the Ferreti Group.

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