Milan, Italy - Pirelli & C. SpA has withdrawn the public offering of shares in Pirelli Tyre SpA, saying market conditions globally did not allow it to realise the unit's "intrinsic value."
Pirelli launched the initial public offering of shares in Pirelli Tyre on June 21 to the public on the Borsa Italiana and to institutional investors worldwide at an indicative price of 7.40 to 9.00 euros ($9.32 to $11.34) per share.
The IPO was to comprise at least 22.5 million shares, or 25 percent of the maximum 90 million shares, which in turn represented 35 percent of the company's total share capital.
In explaining its decision, Pirelli said it believes the "present condition of financial markets and the stock market performances of the worldÂ´s leading operators in the tyre sector, in particular, have not allowed the attribution to Pirelli Tyre SpA of a value which faithfully and adequately reflects the company's intrinsic value."
Proceeding under present conditions, Pirelli said, "would not have adequately valued a company recognised as one of the world's key operators in terms of profitability, positioning and capacity for innovation."
Pirelli earlier said the IPO would value the company at around $2500 million and generate between $840 million and $1000 million in cash for the company.
Pirelli Tyre SpA reported sales last year of $4500 million, with 24 000 employees at 24 factories in 12 countries and commercial activities in more than 160 countries.
From Rubber & Plastics News (A Crain publication)
Press release from Pirelli
Pirelli Tyre IPO banks in talks to buy 35 pct of co after failed float - rep AFX via Forbes (Italy)