07-06-2011, 07:08 AM
(This post was last modified: 23-10-2013, 02:55 PM by CityFarmer.)
Jun 7, 2011
Prada seeks to raise $3.2b from HK listing
HONG KONG: Italian fashion house Prada is seeking to raise US$2.6 billion (S$3.2 billion) from its initial public offering (IPO) in Hong Kong, giving the maker of luxury bags and Miu Miu dresses a value higher than its European peers.
Prada set an indicative price range of HK$36.50 (S$5.80) to HK$48 a share for the IPO as it started meetings with Asian investors to gauge appetite for the deal, a source with direct knowledge of the plans yesterday told Reuters.
The IPO - designed to cut Prada's debt of about €1billion (S$1.8billion) and fund further expansion in Asia - is being priced at 27 times projected 2011 earnings, at the top end of the range, the source said, higher than the average of European top luxury groups such as Tod's, Burberry and LVMH.
In Singapore, about 60 investors and fund managers attended a lunch-time presentation by Prada chief executive Patrizio Bertelli. Some expressed concerns about the pricing.
'There's no reason for it to trade higher than LVMH, which has a more diversified portfolio. Prada may be banking on the China story, but all the other luxury brands are also going into China and it's going to be very competitive and tough there,' said one manager of a Singapore-based fund, who declined to be identified.
However, Prada may take heart from upscale clothing maker Moncler's decision, announced yesterday, to drop plans for its own IPO in Milan after it sold a stake to investment firm Eurazeo.
Some investors had said competition from a Moncler flotation, together with the upcoming listing of luxury shoemaker Ferragamo, could have dented investor appetite for Prada's offering.
'Prada is a known name to Asian investors. I think the appetite for this IPO really depends on where the price will be within that range,' said Julius Baer Luxury Brands Fund portfolio manager Scilla Huang Sun. 'This will also depend on market sentiment in the coming days, given that markets are a bit volatile now.'
Prada, 95per cent owned by the families of Mr Bertelli and his fashion designer wife, Miuccia Prada, is betting on a boom in the consumption of luxury items in China, the world's second-largest economy, to lure investors to the IPO.
China will account for 20per cent of the global luxury market by 2015, consulting firm McKinsey & Co says.
The IPO is slated to be priced on June17 and the shares will start trading in Hong Kong on June24 under the symbol '1913', the year the company was founded in Milan.
Prada, which repeatedly scrapped plans for an IPO over the past decade, is the first Italian company to float in Hong Kong - underscoring the weight of the Asian market, which accounted for 40per cent of Prada's €2billion sales last year.
REUTERS
Prada seeks to raise $3.2b from HK listing
HONG KONG: Italian fashion house Prada is seeking to raise US$2.6 billion (S$3.2 billion) from its initial public offering (IPO) in Hong Kong, giving the maker of luxury bags and Miu Miu dresses a value higher than its European peers.
Prada set an indicative price range of HK$36.50 (S$5.80) to HK$48 a share for the IPO as it started meetings with Asian investors to gauge appetite for the deal, a source with direct knowledge of the plans yesterday told Reuters.
The IPO - designed to cut Prada's debt of about €1billion (S$1.8billion) and fund further expansion in Asia - is being priced at 27 times projected 2011 earnings, at the top end of the range, the source said, higher than the average of European top luxury groups such as Tod's, Burberry and LVMH.
In Singapore, about 60 investors and fund managers attended a lunch-time presentation by Prada chief executive Patrizio Bertelli. Some expressed concerns about the pricing.
'There's no reason for it to trade higher than LVMH, which has a more diversified portfolio. Prada may be banking on the China story, but all the other luxury brands are also going into China and it's going to be very competitive and tough there,' said one manager of a Singapore-based fund, who declined to be identified.
However, Prada may take heart from upscale clothing maker Moncler's decision, announced yesterday, to drop plans for its own IPO in Milan after it sold a stake to investment firm Eurazeo.
Some investors had said competition from a Moncler flotation, together with the upcoming listing of luxury shoemaker Ferragamo, could have dented investor appetite for Prada's offering.
'Prada is a known name to Asian investors. I think the appetite for this IPO really depends on where the price will be within that range,' said Julius Baer Luxury Brands Fund portfolio manager Scilla Huang Sun. 'This will also depend on market sentiment in the coming days, given that markets are a bit volatile now.'
Prada, 95per cent owned by the families of Mr Bertelli and his fashion designer wife, Miuccia Prada, is betting on a boom in the consumption of luxury items in China, the world's second-largest economy, to lure investors to the IPO.
China will account for 20per cent of the global luxury market by 2015, consulting firm McKinsey & Co says.
The IPO is slated to be priced on June17 and the shares will start trading in Hong Kong on June24 under the symbol '1913', the year the company was founded in Milan.
Prada, which repeatedly scrapped plans for an IPO over the past decade, is the first Italian company to float in Hong Kong - underscoring the weight of the Asian market, which accounted for 40per cent of Prada's €2billion sales last year.
REUTERS
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