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.

This story first appeared in the June 8, 2011 issue of WWD. Subscribe Today.

“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, but Asian investors might have a different perspective.”



On Tuesday night, Prada held a fashion show in Hong Kong for prospective investors and financial types as part of its roadshow presentation. Both Miuccia Prada and her husband Prada ceo Patrizio Bertelli were present for the recap of the fall-winter season.

The shares are set to start trading June 24 on the Hong Kong exchange. Proceeds from the market listing will help Prada embark on an aggressive store opening program, and a focus on Asia. Prada will be the first Italian company to list its shares in Hong Kong.

As reported, Banca IMI-Intesa Sanpaolo Group, which owns 5.1 percent of Prada and is one of the banks leading the IPO, estimates the entire company could be valued at 10.7 billion euros, or $15 billion at current exchange, according to a source. Until recently, analysts have said the IPO could value the company at up to $9.5 billion. UniCredit, CLSA-Crédit Agricole Group and Goldman Sachs were tapped as joint global coordinators and joint book runners on the proposed IPO.

Banca IMI-Intesa Sanpaolo, which owns 5.1 percent of the firm, is expected to sell its shares, while the remainder of the shares being sold will come from designer Miuccia Prada and chief executive officer Patrizio Bertelli, who control a 95 percent stake through Amsterdam-based Prada Holding BV.

A press conference and presentation about the IPO will be held in Hong Kong on Sunday, with Bertelli videoconferencing from Milan.

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