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More Details on Pirelli Tire Unit Sale

(Akron/Tire Review) Pirelli SpA said this weekend that its sale of a 39% share of its tire unit may evolve into an initial public offering of stock, this time in the holding company formed by the six banks that participated in the share purchase.


The tiremaker said it had finalized its deal to sell a share of its global tire business for 740 million euros. The holding company was created by Banca Intesa SpA, Capitalia SpA, JPMorgan Chase, Lehman Brothers, Mediobanca SpA and Banca Leonardo SpA.

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Pirelli had tried to sell a portion of its tire unit in an IPO this past June, but the pricing fell below what the company wanted, so the program was called off. The bank consortium may look at trying another IPO in the future, based on market conditions.

"The agreement allows the buyer to conduct an initial public offering of the shares purchased within a period of four years and six months from the closing," Pirelli said in a statement.
According to Pirelli, the bank group can also sell up to 49% of the total shares purchased to other banks or investment funds after a six-month “lockup period.” Pirelli also has the option to buy back the shares if they are not sold through an IPO within the prescribed time limit.


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