Despite strong sales results and reported investor interest in an IPO offering 30% of the Italian yacht builder’s shares, the Ferretti Group decided to pull the plug on the public listing in the final hours of the offer period citing deteriorating conditions in the financial markets which prevented it from getting the valuation it was seeking.
Opening on 1 October with an indicative share pricing of €2.50 and €3.70, the Offer Period would have delivered a company valuation of between €727m and €1.08bn, with the first day of active trading initially set to begin on the Milan stock exchange on 16 October.
Ferretti initially reported a strong order book during this period, which appeared to bode well for the public listing. The company said it had booked new orders totalling more than €465m for the first nine months of 2019, a gain of 18% over the same period last year, while consolidated group revenue for the whole of 2018 was also up nearly 10% over 2017, totalling €609m for customer contracts. The company reported improved profitability overall as well, with a 29% jump in net income to €31m.
Ferretti’s IPO roadshow made its way from New York across Europe and all the way to Hong Kong, and was supported by a prominent advertising campaign on several financial media websites. However the Group suddenly announced it was extending the offer period, as well as cutting the indicative price range down to €2.00-€2.50, slashing the valuation to €580m at the low end, due to the fact that demand appeared to below what shareholders and the collaborating banks were expecting.
In a shock move, investors were only willing to pay €2.00 per share – a valuation the company’s primary shareholders, the China-based Weichai Group, felt was too low, leading to the group withdrawing its IPO completely.
Even with the demise of the IPO, Ferretti stated that its recent success story gives current management and shareholders the confidence to continue to pursue its development goals and execute its fully-funded business plan. CEO Alberto Galassi said in an interview with Reuters: “You’ll see in 2020 a new investor will come on board,” yet time will tell its impact.