Pirelli drops IPO plan
The board of directors of Pirelli & C. SpA opted to drop the company’s initial public offering of shares in Pirelli Tire SpA on June 30, only six days before the firm was scheduled to debut on the Milan stock exchange.
Pirelli & C. was planning to sell a 35 percent stake in the tire company via the sale of 90 million shares representing an expected market value of Euro 1.9 billion to Euro 2.3 billion ($2.9 billion).
Pirelli officials said the present condition of financial markets and the stock market performances of the world’s leading tire companies would not allow a sale price “which faithfully and adequately reflects the company’s intrinsic value.”
“Pirelli & C. decided not to proceed with the IPO operation which, under present conditions, would not have adequately valued a company recognized as one of the world’s key operators in terms of profitability, positioning and capacity for innovation,” company officials said in a prepared statement.
The decision to abort the IPO was made in the final stages of marketing to investors by a consortium of investment banks, according to a report by The Financial Times that did not cite sources.
The banks, including Goldman Sachs, Mediobanca, Merrill Lynch, JPMorgan, Morgan Stanley and Capitalia, were scheduled to set the official offer price July 1. They had already been forced to cut the price range for the IPO by about 10 percent to between Euro 7.4 and Euro 9 after lackluster demand from investors.
The tire business has weathered some slick spots this year, as the price of rubber has gone up by more than 50 percent in the past 12 months.
A holding company, Pirelli & C. SpA owns and controls 100 percent of Pirelli Tires SpA; Pirelli Broadband Solutions, started Jan. 1, 2005; and Pirelli Labs, launched in May 2001 and active in the field of photonics and optical fibers.
Additionally, it currently holds 51 percent of both Pirelli & C. Ambiente, a company focused on transforming waste into alternative fuels, and Pirelli RE, a management company handling real estate businesses, funds and nonperforming loans.
The withdrawal of the IPO is a significant blow to Pirelli & C., which has about Euro 1.2 billion ($1.5 billion) of year-end debt and wanted to expand its reach in the telecom industry.
In a deal that occurred during the same time as the failed Pirelli Tire IPO, Pirelli & C. and a partner bought a 16 percent stake in Olimpia SpA, the largest shareholder in Telecom Italia SpA, for Euro 622 million ($789 million).
Olimpia owns 18 percent of Telecom Italia.
Pirell Tire’s abandoned offering was the fourth IPO in Italy scrapped by adviser Goldman Sachs in one week. On June 21, the bank pulled three IPOs in a day: Anonima Petroli Italia, a filling station operator and oil refiner, Italtel, a telecom equipment supplier, and Value Partners, a management and IT company.
Pirelli gave no new timetable for a sale.
EagleRider Partners with Hilton
Powersports rental company EagleRider has entered a partnership with the Hilton Family of Hotels.
The partnership allows members of the Hilton Honors program to redeem their points for single day and seven-day EagleRider rentals, or three-day and eight-day self-guided tours.
EagleRider offers rental units by manufacturers such as Harley-Davidson, Honda, BMW and Polaris. The company has facilities in the United States, Mexico, Spain and France.
Hilton Honors reward program includes 2,800 participating Hilton, Conrad, Coral by Hilton, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand Vacations Club, Homewood Suites by Hilton, Scandic and The Waldorf-Astoria Collection hotels around the world.
Illinois Unveils 42-Bike Patrol Unit
The Illinois State Police and Illinois Department of Transportation (IDOT) recently unveiled a Motorcycle Enforcement Bureau, a 42-officer motorcycle patrol unit.
IDOT’s Division of Traffic Safety is providing more than $500,000 for motorcycles, specialized equipment and uniforms for the new unit by obtaining funding through federal highway dollars specifically set aside for improving highway safety.
Officials say the officers will focus on highway safety, primarily speed enforcement, in an effort to make Illinois’ highways safer by targeting the “Fatal Five,” violations of speeding, safety belts, improper lane usage, following too closely and driving under the influence.
HOT NEWS – July 24, 2006
Pirelli drops IPO plan