Mediobanca Sells 5% of Ferrari to Mubadala

Milan, July 27 | Updated: Jul 28 2005, 08:03am hrs
Mediobanca SpA, Italys largest investment bank, sold 5% of Ferrari SpA to Abu Dhabis Mubadala Development Co., part of preparing the sports-car maker for an initial public offering. State-owned Mubadala will pay 114 million euros ($136.8 million) for the stake, the same price Mediobanca paid for the holding in 2002, the Milan-based bank said in a stock exchange filing on Wednesday. Goldman Sachs Group advised Mubadala. The sale values Ferrari at 2.3 billion euros.

This transaction is part of a program aiming at progressively reducing the stake and enhancing its value, which would be carried out also through the IPO, Mediobanca said.

Mediobanca has been preparing for a share sale since buying 34% of Ferrari for 775 million euros in 2002 from Fiat SpA, the countrys biggest manufacturer.

Turin, Italy-based Fiat, which controls Ferrari with a 56% stake, said the sale may occur next year at the earliest.

To prepare for the sale, Mediobanca sold a 10% stake in Ferrari to Commerzbank AG, 6.5% to Lehman Brothers Inc., 1.5% to Banca Popolare dellEmilia Romagna and 1% to Compagnie Monegasque des Banques, a unit of Mediobanca.

Piero Ferrari, an heir of the founder of the company, owns the remaining 10%. Commerzbank and Banca Popolare dellEmilia Romagna SpA will be offered the chance to sell part of their stakes to Mubadala, in which case Mediobanca would sell 3.3% out of the 5% for about 75 million euros, reducing its Ferrari holding to 12.7%, and the remainder would come from the other banks.

Ferrari, founded by race-car driver Enzo Ferrari in 1947, builds some of the fastest and most expensive cars in the world, including the $1 million Enzo, and won 14 Formula One constructors championships, the last six consecutively, with driver Michael Schumacher.

Abu Dhabi abandoned a plan last year to buy 9.8% of Volkswagen AG, Europes largest carmaker, after the companys shares declined. Dubai, Abu Dhabis partner in the United Arab Emirates federation, this year bought a $1 billion stake in DaimlerChrysler AG, becoming the companys third-largest shareholder.Mubadala will be an extremely reliable and stable shareholder, Ferrari said in a faxed statement. The carmakers strategic alliance with Mubadala will initially include professional driving schools and widening the opportunities to develop the brand and merchandizing.Persian Gulf countries are using record oil revenue to fund their purchases of stakes in foreign companies. Abu Dhabi depends on oil for more than half its gross domestic product.

The emirate, with a population of about 1.6 million, will generate a second year of record oil revenue of more than $31 billion in 2005, according to Standard Chartered Plc, a London-based bank.

Saudi Arabia, Kuwait, the UAE and other Gulf Arab oil-producing monarchies may benefit from a second year of record oil revenue in 2005 of more than $200 billion on higher international prices, Standard Chartered said.Crude oil prices in New York have risen 52% this year to $51.37 a barrel compared with $33.73 a barrel a year earlier, according to Bloomberg data.

Diversification through overseas acquisition will be an increasing feature throughout the Persian Gulf region, Daniel Hanna, Standard Chartered Middle East economist said in an interview in Dubai.