Prada’s road show is charging full steam ahead. While heading to Hong Kong today, and afterward scheduled to travel on to London, Milan and New York, its first leg in Singapore on Monday drew bids for all the shares reserved for institutional investors, according to a source. A Prada spokesman declined to comment.
“The road show is a way to gauge investors’ interest. Prada will then appraise their portfolio of orders and, based on this, they will define the price,” said a Milan-based analyst, who requested anonymity. “If Prada sees that the offer is oversubscribed, they will opt for the highest point in the fork and may even choose to raise the price.”
According to a source, the luxury company set a price range of between 46.50 Hong Kong dollars to 48 Hong Kong dollars, or $4.69 to $6.17 at current exchange, a share. Prada aims to sell 16.5 percent of its share capital, or 423.3 million shares following a capital increase, and the group is expected to raise up to 20.32 billion Hong Kong dollars, or $2.6 billion.
At the top range of the price, the offer is valued at 27 times Prada’s 2011 expected net profits of 400 million euros, or $584.8 million. The final price will be determined on June 17, at the end of the road show.
“These multiples would be considered exaggerated here, but there is a different, more long-term vision in that region,” said the analyst, speaking of the Hong Kong Stock Exchange. “In any case, values are difficult to attribute, and these also depend on the company’s results and prospects. Seen with the eyes of the Anglo-Saxon analyst these multiples look impossible, butAsian investors might have a different perspective.”
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