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Financier makes play for Piaggio

May 12, 2003
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Italian financier Roberto Colaninno is reportedly holding talks with Deutsche Morgan Grenfell about buying its controlling stake in manufacturer Piaggio Holding SpA.
Colaninno, 60, who may have benefited greatly after a Pirelli-led group bought control of Telecom Italia from him in 2001, appears to be planning the purchase through Immsi SpA, a recently acquired real estate investment group.
On May 5, during an Immsi shareholders meeting, Colaninno confirmed that the investment group seeks a majority of the voting rights at Piaggio, and said he plans to capture a stake in the manufacturer through a capital increase. Colaninno, during the meeting, said negotiations are on-going, reports Dow Jones Newswire.
Immsi, which is 50.4% owned by Colaninno’s unlisted Omniapartecipazioni SpA holding company, appointed Lehman Brothers Holdings Inc. as its adviser in the negotiations.
Piaggio is 57.4%-owned by Deutsche Bank AG’s private equity arm Deutsche Morgan Grenfell; 8.1% by U.S. private equity firm Texas Pacific Group (TPG); 5% by Spain’s National Motor; and 29.5% by Piaggio Acquisition Sarl, a special purpose vehicle owned 86% by institutional investors and 14% by Banca Intesa SpA.
While Piaggio’s Vespa scooters are known throughout the world, and the company had estimated 2002 sales of $1.124 billion, it has struggled financially amid weak demand in its home market, and at the beginning of the year announced a $112 million capital increase, of which Deutsche Morgan Grenfell committed to underwriting about $28 million.
While a Reuters source says Piaggio is about $450 million in debt, other newspapers have put the debt total at around $615 million.
On April 26, La Repubblica newspaper reported that Colaninno was set to take a minority stake in Piaggio by underwriting a $112 million capital increase and getting two of the company’s largest creditors, Banca Intesa and Monte Paschi, to convert their loans into equity. Other newspapers carried similar accounts.
According to analysts in Italy, Colaninno could create an integrated Italian two-wheeler company by merging or allying Piaggio with MV Agusta or Ducati, which is controlled by TPG. For the record, TPG has denied a plan to sell its 33.5% stake in Ducati.
But, according to Colaninno’s past business dealings, alliances and partnerships have been key elements in the companies he has founded or led.
Colaninno began his career in 1969, when he joined Italian auto components manufacturer Fiaam as administrative director. Three years later he was appointed to the post of CEO and gradually expanded the company’s operations.
In 1981, in Mantua, Italy, Colaninno founded Sogefi, an auto component manufacturer. Thanks to globalization and an international alliance strategy, he developed Sogefi into one of Italy’s leading auto component makers, with revenues of 1,000 billion lire (EU 520 million, or $584.3 million) and about 30 manufacturing facilities in more than 20 countries.
In 1996, he took over at Olivetti SpA, a leading business machine and telecommunications firm; and, in 1999, working with a group of investors, launched the hostile takeover of Telecom Italia SpA in a deal said to be worth $51.4 billion.
Colaninno is a director of Banca Agricola Mantovana and Mediobanca, and is a member of the European RoundTable of Industrialists, a group of some forty leaders of Europe’s largest companies who meet periodically to discuss key economic and industrial issues for presentation and recommendation to European government bodies.

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