Italy's Brembo starts sale of Pirelli stake, dampening merger speculation
Adds detail on significance of move in paragraphs 5-7, advisors in paragraph 11
MILAN, Oct 1 (Reuters) -Brembo BRBI.MI said on Tuesday it was starting a process to sell its entire stake in tyre maker Pirelli PIRC.MI, worth around 300 million euros ($332 million), a move dampening speculation about a merger between the two Italian groups.
Premium brakemaker Brembo currently owns some 5.6% of Pirelli. It built its stake from 2020 to reach a 6% level at one point and also entered a shareholder agreement in 2023 with Camfin, the vehicle of Italian businessman Marco Tronchetti Provera, Pirelli's second largest investor.
Tronchetti Provera, who has led Pirelli since 1992, is now its executive vice chairman.
Shares of Formula One tyremaker Pirelli have risen almost 75% since Brembo bought its initial stake during the outbreak of COVID-19 pandemic.
Brembo's purchases fed speculation about an Italian shareholders' block emerging within Pirelli to balance the influence of its largest shareholder, Chinese state-owned Sinochem Group 600500.SS, especially as the Rome government intervened last year to curb Sinochem's grip on the company.
Speculation also pointed to a potential mid-term plan for a merger between the two companies to create an Italian heavyweight in the premium automotive parts industry.
Brembo has said in the past it was looking for opportunities for an acquisition of "significant size", even as big as the company itself, but so far has never eyed a concrete target.
However the company - which is controlled by the Bombassei family with a stake around 70% - early this year moved its legal headquarters to the Netherlands to strengthen its loyalty share scheme and increase its ability to capitalise on M&A opportunities.
ACCELERATED BOOK BUILDING
Brembo is performing the sale of its Pirelli shares through a so-called accelerated book building process, which will start "immediately", the Italian company said in a statement.
BNP Paribas has been appointed as sole global coordinator for the placement deal.
An ABB is a form of offering where banks act as bookrunners and in which shares are offered during a short time window, generally lasting between 24 hours to 48 hours.
($1 = 0.9042 euros)
Reporting by Giulio Piovaccari; editing by Valentina Za, Keith Weir and Jan Harvey
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
