Hong Kong-listed Ferretti went the extra mile to ensure its shares could finally trade in Europe. The 1 billion euro Italian manufacturer of pricey Riva speedboats, bought by Chinese conglomerate Weichai in 2012, had to pay chunky fees and woo unusual backers to pull off a second listing in Milan. That’s the price to pay to secure a geopolitical hedge.
Ferretti’s homecoming was off to a slow start on Tuesday. An initial 4% rally quickly fizzled out and shares fell below the Italian company’s 3-euro-per-share offering. At 13 times its expected 2023 net profit , Ferretti traded at a discount to rival Sanlorenzo’s (SNL.MI), opens new tab 15 times multiple. That’s a modest outcome for a company that has laboured since 2019 to try and list in its Italian home base, opens new tab. To ensure maximum interest, Weichai paid 4% of the listing proceeds to banks like Goldman Sachs (GS.N), opens new tab and JPMorgan (JPM.N), opens new tab involved in its Italian stock market sale, according to financial specialist publication IFR. That compares to the 2.5% fee Italian gambling company Lottomatica (LTMC.MI), opens new tab paid for its Milan market debut in May. Weichai also had to win early backing from a group of anchor investors mainly comprised of European tycoons Danilo Iervolino and Karel Komárek, and an Abu Dhabi fund. They pre-ordered nearly half of the stock sold by Ferretti’s Chinese owner, and are now expected to collectively own 13% of the speedboat maker.
Weichai will still hold on to nearly a third of Ferretti’s shares after its Milan listing. The East-to-West journey looks expensive. But at least CEO Alberto Galassi is reassured the company has less exposure if caught in a showdown between China and the West. (By Yawen Chen)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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