Pirelli to sell 39% stake in Pirelli Tyre unit
The board of directors of Pirelli & C. S.p.A. has approved going ahead with a plan to sell a 39-percent stake in its Pirelli Tyre S.p.A. unit to a consortium of international banks.
The deal, which will generate nearly $950 million in capital for Pirelli, is a precursor to the banks' reissuing the stock at a later date as an initial public offering (IPO), according to Pirelli.
The move comes three weeks after Pirelli withdrew its own IPO after it determined market conditions globally did not allow it to realize the unit's ``intrinsic value.''
The board of directors directed Pirelli Chairman and CEO Marco Tronchetti Provera to finalize details of the placement with the banks.
The banks involved are Banca Intesa, Banca Leonardo Group, Capitalia, One Equity Partners-JP Morgan, Lehman Brothers and Mediobanca, Pirelli said. The value of the shares places the equity value of Pirelli Tyre at $2.4 billion.
The Milan-based firm reported sales last year of $4.5 billion, with 24,000 employees at 24 factories in 12 countries and commercial activities in more than 160 countries.