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Friday, October 23, 2015

Ferrari Family Maneuvers to Retain Its Control Following IPO

BOLD RIDE

 
1966 Ferrari 275 GTB4 Berlinetta

Since its inception, Ferrari has been a family business. As far back as Enzo himself, the notion of a hot-blooded family dynasty making the calls at one of the most passionate automakers in the world was a romanticizes notion that fed the Ferrari supercar image. But what happens now that the company has gone public?
 
According to Bloomberg, the heirs to the founder Enzo Ferrari are attempting to sign an agreement that would give them tighter control over the publicly traded supercar company. Piero Ferrari and the Agnelli family are the heirs to Enzo that are attempting to take advantage of rules under the terms of the IPO that would give them nearly half the company’s voting rights. This would make a potential takeover nearly impossible.

The 70-year-old Piero Ferrari has 10 percent stake in the company, while the Agnellis’ – through their holding company Exor SpA – will have a 23 percent stake once Fiat Chrysler Automobiles spins off its 80 percent stake in 2016.
 
As part of the IPO, there is a “loyalty share plan,” in which stockholders who pledge to keep their shares for at least three years will get special voting privileges. The result is that the combined heirs have a 48.7 percent stake in the voting control of the company.


01-laferrari

The IPO of Ferrari, which trades under the ticker symbol RACE, made Piero a billionaire overnight, earning him $1.1 billion (the value of his stake as of Oct 21). He contends the “fortune was always there” as the heir never intended to sell his stake in the company, of which he is still vice chairman.

Piero is the son of Enzo’s mistress, and was not acknowledged as a member of the family until 1978, when Enzo’s wife passed away (divorce was illegal in Italy until 1975). Some time in the 1970s he began working for the family business and became vice chairman in 1988, the year of Enzo’s death.

Ferrari is currently has a market value of $11 billion.