MILAN • Ferrari raised US$893 million (S$1.2 billion) in its US initial public offering, pricing the shares at the top-end of the marketed range after investor demand in the supercar maker outstripped the stock available.
Majority shareholder Fiat Chrysler Automobiles, which is selling a 9 per cent stake in the iconic Italian brand, priced 17.18 million shares at US$52 each, according to a statement on Tuesday.
Including debt Ferrari will take on from Fiat, the company will have an enterprise value of about US$12 billion.
The shares were to start trading yesterday, listed on the New York Stock Exchange (NYSE). Ferrari opened at US$60 in its debut.
Chairman Sergio Marchionne, who is also Fiat Chrysler's chief executive officer, will ring the opening bell at the NYSE with other executives, including vice-chairman Piero Ferrari, the son of founder Enzo Ferrari, and Fiat Chrysler chairman John Elkann, whose family will become Ferrari's biggest shareholder after the spin-off from its Italian-US parent company next year.
Fiat Chrysler will raise more than US$4 billion from taking Ferrari public, including an extra 1.7 million shares in an over-allotment to underwriters, plus €2.8 billion (S$4.4 billion) in additional cash that the division will provide before next year's spin-off.
Fiat Chrysler fell 3.3 per cent to €13.75 at 9.15am in Milan.
The shares traded in New York have risen more than 60 per cent since Oct 28 last year, the day before Mr Marchionne announced the plans for Ferrari.
That is the best performance among major auto industry stocks - compared with a gain of about 7 per cent for General Motors and a plunge of almost 40 per cent for the preferred shares of Volkswagen, the German company that has been grappling with a diesel-emissions test-cheating scandal.
Investors' demand for Ferrari shares greatly exceeded the number available, people familiar with the matter said last week.
Fiat Chrysler is limiting the stock on sale to ensure that it is sought after, in the way that Ferrari boosts its products' allure by capping the number of cars it makes.
Fiat Chrysler plans to distribute its remaining 80 per cent stake in Ferrari to its own investors early next year. Mr Piero Ferrari will retain his 10 per cent holdings.
Analysts say Mr Marchionne has been astute in bringing a restricted number of shares to market - a strategy that mirrors Ferrari's own market approach of keeping production tight to preserve its exclusive cachet.
Ferrari shipped 7,255 new cars to its wealthy customers last year, and the prospectus envisages only a gradual expansion to around 9,000 a year by 2019. "We believe our cars are the epitome of performance, luxury and styling," the firm said.
Cash from the disposal is critical to enable Fiat to finance a €48 billion investment programme focused on expanding the Jeep, Alfa Romeo and Maserati nameplates, as Mr Marchionne seeks to boost annual deliveries by more than 50 per cent to seven million vehicles by 2018.
Interest in Ferrari contrasts with lacklustre demand for other IPOs. Three US deals faltered within about a week this month, as Digicel Group cancelled a sale, First Data priced shares below a marketed range, and Albertsons postponed its offering.