Pirelli & C. S.p.A.'s directors have OK'd the a plan to sell a 39-percent stake in Pirelli Tyre S.p.A. to a consortium of international banks, three weeks after the Italian company withdrew an initial public offering for the tire division.
The deal, which will generate nearly $950 million in capital for Pirelli, is a precursor to the banks' reissuing the stock at a later date as an initial public offering, according to Pirelli. Pirelli pulled back its IPO after it determined global market conditions didn't allow the company to realize the tire operation's real value.
The directors told Marco Tronchetti Provera, Pirelli chairman and CEO, to complete the details of the placement with the banks-Banca Intesa, Banca Leonardo Group, Capitalia, One Equity Partners-JP Morgan, Lehman Brothers and Mediobanca.
The value of the shares places the equity value of Pirelli Tyre at $2.4 billion.
Pirelli Tyre reported sales last year of $4.5 billion, with 24,000 employees at 24 factories in 12 countries and commercial activities in more than 160 countries, Pirelli said.