Fiat to Spin off Ferrari

Roberto Fedeli did leave. Perhaps he suspected this as well.

 

Who's going to buy these cars? Reality is people have a hard time getting by, who are their potential new customers? People who already buy these brands?

 

what cars?

 

I think what they mean is that the Ferrari shares owned by FCA are being distributed to FCA shareholders after they split off the initial 10% -- meaning that FCA will not retain any of Ferrari. Fascinating! Combined with the announcement that Marchionne is personally leading Ferrari, wonder if this isn't all just a succession planning exercise for FCA!

 

Absolutely. Often a spin announcement is a way of soliciting bids to buy the company being spun.

Then again, sometimes a cigar is just a cigar.

 

Yes, Ferrari borrows so that FCA can have money. Not an unusual structure for a spin.

But given the significant ownership of the families, you'd have to think they would be a little crazy to over-leverage Ferrari just to benefit FCA?

 

I think you'll have to work a bit to get an actual paper certificate. These days, all shares are pretty much book-entry only unless you hound them for the paper (and maybe not even then).

 

Ferrari should offer shares of the IPO first to registered Ferrari car owners! Little perk for brand loyalty. They should have some kind of investment program setup for this where you can put in for an allocation of shares (no limit) and decide if you want some or all issues via book entry or certificates. Just sayin'

 

This is Ferrari. Therefore, they would take a certificate for a single share of stock worth $20, mat it, stick it in an "authentic" ferrari frame, and sell it for $250 out of their ubiquitous gift shops.

 

The cars they are robbing from Peter to pay Paul with. If they are selling Ferrari stock to fund other marques who is going to buy those cars?

 

If I was chairman of apple I would consider to buy ferrari. They have 150Bn dollar in cash.
It would fit there image of extreme performance and luxury goods

 

Marcel, perhaps I've misread the press on this. I had understood that FCA bonds would have to be purchased by buyers of Ferrari SpA shares as a part of the iPO. I'm not clear on how they expect buyers of Ferrari shares on the IPO to buy significant amounts of FCA bonds. Nor is a Ferrari company saddled with billions of dollars of FCA debt with no financial benefit to Ferrari a very attractive economic proposition.

What do you understand to be the terms of the Ferrari IPO of 10% of the Company with subsequent distribution of the remaining 90% to FCA shareholders?

 

Have you driven the cars for sale today? 2003 is a very long long time ago!

Today's Maserati is not selling those cars. Today's Maserati is selling an E class level car for an S class price.... This isn't the model for sustained volume sales. And Maserati needs volume sales...

 

He went to BMW and now we hear of an improved i8 model coming out in 2-3 years time to celebrate BMW's 100th birthday...

 

My 2004 CC Coupe would concur.

 

Ah, your thinking the FF set the stage for Traveller XL. Good call.

 

I saw nothing to indicate that this is a leveraged spin. It may ultimately be, but the 2.5 bn convertible offering is FCA and appears unrelated to Ferrari. They did say that they expect bondholders who convert into FCA shares to be in a position to receive Ferrari shares in the spin off, like any other FCA shareholder of record. The 10 percent looks to be a partial IPO that will be sold broadly to the public. The Ferrari shares FCA owns after that will be dividended out to FCA shareholders pro rata.

 

Ferrari getting floated...the pessimist in me is thinking its a sign of the top of the market. Never underestimate the arrogance of new management! As LDM rides off into the sunset we are told about these 'ultra limited editions'...the US F12 NART and the Sergio...not sure if I like it, and won't be disappointed that nothing comes in the mailbox!

 

+1

 

Luca's and Sergio's fantasies of Ferrari:
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Although it is not uncommon for spun off companies to take on debt to fund a one-time cash dividend to the parent prior to the spin (leveraged spin), I didn't see anything in the announcement that suggests that FCA was doing that here. They did talk about a $2.5 bn convertible debt offering at the FCA level and did mention that buyers of those notes could expect to participate in the spinoff by means of the underlying FCA shares receiving the dividend of Ferrari stock, but that to me is not the same is saying they will lever up Ferrari. Of course, that doesn't mean they won't ultimately do that, but the large family ownership stakes suggest to me that they won't overdo it. Am I missing something?

 

Have seen comments to the effect that the 4 billion financing plan includes debt to be transferred to Ferrari, amount not stated.

 

LOL

 

Change can be good. the whole Luca Ferrari schtick was getting stale. i would just liek some great drivers cars to come out of this, that si my interest and interest in ferrari, the rest is all fluff, although that fluff has sold well.

 

When the head of Fiat-Chrysler was in Beverly Hills to announce the F60 a few weeks ago, I should have asked him why he isn't worrying more about coming up with a replacement for the Chrysler 300 which is really growing stale in styling. You need a bread and butter car that is bought by the millions to make it as a carmaker in America. So he shouldn't be occupying his time worrying about tiny niche models in the Ferrari line. (I didn't approach him because of determined bodyguards..) That is a little like asking a food planner at McDonalds for advice on planning a gourmet meal at The Palm.
But anyway I think separating out Ferrari as a separate entity leaves them to make their own decisions, and with more flexibility. And a split is significant especially if Fiat-Chrysler hits the rocks of reality and sinks, a split allows Ferrari to escape their fate. Fortunately for Chrysler, America still loves Ram pickup trucks. One punster joked that Chrysler is a pickup truck company that also makes cars. With the Ferrari stock at under $12 a share I would think a Ferraristi would now be able to brag he owns a few hundred or thousand shares, and he would no longer have to support Chrysler with their convoluted marketing plans.

(though I do think the John Varvatos Luxury Edition SRT8 is a good idea, (even if putting lipstick on a pig doesn't mean it still isn't a pig)