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On the 60th anniversary of the iconic Vespa, maker Piaggia goes public
MILAN, Italy – Nothing on wheels more personifies Italian style than the Vespa scooter, whose carefree spirit was immortalized by Audrey Hepburn and Gregory Peck circling Rome's piazzas in the 1953 film "Roman Holiday."
The Vespa's familiar curved frame has a found a place in design museums and in the hearts of Europeans, who first hopped aboard simply to get around after World War II and who still cling dearly to its handlebars as they zip through clogged streets.
Now, as the Italian icon turns 60, the company that makes the Vespa is about to go public.
The move is a sign of Piaggio & C SpA's return to health after being rescued from the verge of collapse by Roberto Colaninno, the former Telecom Italia chief executive whose holding company Immsi SpA bought Piaggio in 2003 and brought the company to record sales in two years.
"The IPO is the conclusion of the rescue started at the end of 2003, and the result of agreements signed at the moment of the decision to save the company," Colaninno told reporters Tuesday after presenting the company's portfolio to potential investors. "We have a strong young boy who is now ready to walk on his own."
Europe's largest scooter-maker by revenue, Piaggio is selling a 31 percent stake raising between 274 million euros and 348 million euros ($346 million and $440 million) during an initial public offering that ends July 5. Shares are priced in a range of 2.30 euros to 3 euros ($2.90 to $3.79), valuing the company at between 886.8 million euros and 1.16 billion euros ($1.12 billion and $1.46 billion).
Final pricing will take place on July 10, and the stock market debut is slated for July 11.
Immsi, the controlling shareholder, has already increased its stake to 49 percent before the offering and intends to raise its share to between 56 percent and 58 percent by the end of the IPO, Colaninno announced Tuesday, giving Piaggio a long-term industrial shareholder.
The sale capitalizes on Vespa's carefree image as much as fundamentals: Piaggio posted a net profit in the first quarter of this year of 10.2 million euros ($12.9 million) on revenue of 374.2 million euros ($473.1 million), compared with a loss of 10.2 million euros ($12.9 million) a year earlier.
An investor should be someone "who believes in a product that is a combination of technology, beauty, style, dreams and sport," Colaninno said. "We're not just about transportation, but about a particular concept of transportation, stylish, fun and luxurious."
The Vespa, paradoxically, was created for those who disliked motorcycles. Inspired by a woman's bicycle, the open design makes it possible to mount the Vespa without raising a leg and allows well-heeled women to sit easily behind the handlebars, where controls for the accelerator, clutch and brakes are located.
While the Vespa remains Piaggio's most recognized product, the company now has seven well-known scooter and motorcycle brands, including Aprilia and Moto Guzzi. The group brings some half-dozen new products to the market each year, including redesigns, said CEO Rocco Sabelli.
Next month, the world's first three-wheel scooter, the Piaggio MP3, will go on sale in Europe. With an unusual configuration of two parallel front wheels, the scooter is designed to brake and handle more efficiently, reducing the danger of slipping on a turn.
Piaggio aims to be multinational, with operations targeting vastly different markets with selected products, Colaninno said. Toward that goal, Piaggio has expanded into India, where Colaninno estimated it would take 50 years to fully exploit the market, and into China, through a joint venture with the group Zongshen in 2004.
The company also was considering entry into Brazil, South Africa and further into Asia.
Piaggio is targeting increased sales in the United States, where it has just a 1 percent market share for two-wheelers, worth about 50 million euros ($63 million) in revenue, Sabelli said. He said the company believes that could get up to 2 percent or 3 percent, tripling revenues.
"The offering signals the passage from the phase of restructuring, now finished, to the phase of development, now under way," Sabelli said.
Copyright © 2006 The Seattle Times Company