CASE
Milan , March 20, 2015 – 10:53
Pirelli in the spotlight at the Milan Stock pending tender offer that should lead to delisting of the company and the entry of China National Chemical Corporation, giant public from 70 billion euro in sales, also active in the business of tires, with which the Bicocca would weld a new alliance. Thursday the actions of the group led by Marco Tronchetti Provera opened the session rising by nearly 5%, exceeding EUR 15 share – the highest for 25 years – and continued around that level for much of the day before closing at + 3.26%. And today the stock continues up 5%. Camfin and its shareholders have today confirmed that “negotiations are underway with an industrial partner to the international transaction relating to the investment held by Camfin in Pirelli.” Consob that it had “turned the powers” to check for any abnormalities. Yesterday meetings have followed, including the headquarters of the Bicocca, to try to get quickly to the square. That, according to some, would be found and thus the announcement could come today. But the plan developed by the Lazard is very articulate and has already undergone changes, so there is still caution.
The scenario
The move by Tronchetti, which will remain in command of the group managing the entire reorganization, opens a new scenario for Pirelli, who just two years ago has teamed up with the Russian giant Rosneft. Now would broaden the geography with the entry of a new industrial partner with which to develop the business further tire and extract value from Bicocca. Today the Far East already accounts for 9% to the turnover of Pirelli, from 6% in 2008, and Russia comes instead 4%. The decision to establish the alliance through a tender offer, in which the current members of the group would enter stable, reinvesting, however, a part of the housing to maintain the position, would be chosen to accelerate the path to the reorganization. In which the Milan group would proceed to the spin-off of assets “industrial” tires for trucks and heavy vehicles, to integrate them with those of Aeolus, the subsidiary of ChemChina specialized in the same segment. It is a passage that will require the identification of the scope to be separated, its evaluation together with that of the activities of the partner to whom would be conferred, and then the integration. A long that the possible delisting would make faster.
The farewell Stock Exchange
The farewell to the stock market, however, will not be definitive. The agreements between the members – negotiations Chiomenti law firms, Clifford Chance, Linklaters and Pedersoli – besides confirming for five years, the management led by Tronchetti, give the president the power to decide, within the four year later, to bring Pirelli on the Stock Exchange . A Pirelli different. The assets ‘industrial’, spun off and combined with those of the Chinese, would create the fourth or fifth group in the world in the segment ‘truck’. Then it will be possible to bring in the new Pirelli Stock Exchange, which is the only part of “car” and “motion”, whose margins are higher, the market could evaluate multiple above the present. The transaction, expected to be created in the value resulting from the spin-off, passing completely from the market would give an immediate benefit also to the minority shareholders.
For the majority shareholders, in addition to the advantage of an alliance with ChemChina, partners with broad shoulders and a huge market to be exploited, it is possible thanks to cash takeover bid, remaining a shareholder. A portion of the proceeds would be reinvested in fact and shareholders would fold for five years through a shareholders’ agreement, which is confirmed in the leadership Tronchetti until 2021.
March 20, 2015 | 10:53
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