Abu Dhabi’s sovereign wealth fund, via its investment vehicle AMubadala Development Co, has sold back its 5 per cent stake in Ferrari to Fiat. It’s not that the sheiks were tired of Ferrari. Fiat wanted their shares back. Fiat had an option that gave it the right to buy back the stake that Mubadala had acquired in 2005 from Mediobanca, Italy’s largest investment bank for €114 million, domain-b reports.
Fiat paid €122m ($167m) to buy back the stock. Now their holdings climbed from 85 percent to 90 percent. Why would you want 90 percent in a small sports car maker if you already have 85 percent, and you need every penny of cash?
For a little more than a week, there have been rumors on the circuit that Fiat wants to sell all or half of Ferrari to raise cash. And who would buy the horsey brand? Of course, Volkswagen was the usual suspect. Germany’s Manager Magazine claimed that Piech was interested in buying Alfa Romeo, but that “the real object of his desire” would be Ferrari. It’s missing in Piech’s Porsche-Bugatti-Lamborghini collection.
Last week, both Marchionne and Winterkorn dismissed any flirtations. Both said in unusual unison that such plans are “just a dream.” Ok, but then why is Ferrari being prettied up for a sale? And who else than the inveterate veteran sport car collector in Wolfsburg would be interested? If won’t be cheap. If 5 percent go for $167m, then 50 percent would be worth at least $2b. Remember, Fiat exercised an option, and an option is rarely exercised at market value. You usually only exercise an option if you can sell the underlying stock for much more.
Who might be the buyer? Any ideas?