Exor, the holding company of the Agnelli family, has made headlines with its recent announcement concerning its significant stake in Ferrari. Following the accelerated bookbuilding process, Exor sold approximately 7 million shares of Ferrari, equaling about 4% of the company’s total outstanding shares, fetching around €3 billion. This move has set the stage for both strategic investment opportunities and some uncertainty about the future of Ferrari stocks.
Ferrari responded positively to the developments by announcing its own initiative to buy back 666,666 ordinary shares for roughly €300 million. This repurchase aligns with Ferrari's long-term stock repurchase program, originally announced during its Capital Markets Day back in 2022 and worth about €2 billion. The purchase falls within the parameters set by the company’s annual shareholder meeting, held on April 17, 2024. The completion of these transactions is forecasted to happen on March 3, 2025.
Despite this repurchase, the market didn't react favorably to the news initially. Just hours after the announcement, Ferrari stocks dropped by 7.5%, sinking to €447.30—its lowest since early February. This decline has baffled many as the year-to-date performance remained strong, boasting over 9% gains. Analysts suggest the significant sell-off price around €450, which was lower than the last closing price of €483.10, fueled fears among investors.
Exor's stake reduction is noteworthy but doesn't imply any withdrawal from the luxury carmaker. The holding company still retains approximately 20% of Ferrari's economic rights and 30% of its voting rights, affirming its status as the largest single shareholder. Exor's commitment to Ferrari was solidified with their announcement of adhering to a one-year lock-up period, promising not to sell any remaining shares during this timeframe.
According to Exor, this divestment stems from the necessity to lessen its over-reliance on Ferrari, which had soared to account for 50% of Exor's overall asset value due to impressive performance gains. Diversifying their portfolio will help position Exor for new acquisition opportunities and reduce risks tied to any one asset, as they aim to prevent dependence on their automobile investments.
The company also hinted at intentions to utilize €1 billion from the sale proceeds for stock buybacks, managing to balance share distributions and create room for additional investment initiatives. The remnants of the €3 billion raised will be strategically deployed either to strengthen their existing holdings or explore new ventures.
Noteworthy experts have taken to examining the broader impact of Exor’s decision on the Ferrari stock market. Despite the initial drop, many believe Ferrari’s fundamentals remain strong. The latest figures reveal the car manufacturer reported net revenues of €6.68 billion for 2024, showcasing substantial growth of 11.8% year-over-year, alongside significant increases to operating margins and net profits.
Moving forward, expectations are high for Ferrari to achieve revenues exceeding €7 billion this year, with dividends slated to be issued, albeit at lower yields compared to the past. This highlights the balancing act of ensuring shareholder value amid expansive growth pursuits, which will keep investors intrigued about Ferrari's potential.
While Exor's actions have stirred reactions across the market, its steadfast commitment to Ferrari assures stakeholders of the aim to remain deeply engaged with one of the most iconic brands globally. Their plans to navigate through this transformative period will influence not just their fortunes, but those of Ferrari and its place within the competitive luxury automobile sector.
The wave of interest observed around Ferrari’s stock, combined with Exor's measured approach, sets the stage for potential growth and reshaping for both entities. With Exor forging ahead with its diversified strategy and maintaining its pivotal role within Ferrari, the coming months are poised to be telling of how both navigate this juncture successfully.