Ferrari N.V. has announced its intent to repurchase shares from Exor N.V. as part of its broader share buyback program, signaling confidence in the future of the luxury automaker.
On February 26, 2025, Ferrari (NYSE/EXM: RACE) revealed plans to acquire up to 10% of the shares Exor is selling through an accelerated bookbuild (ABO), amounting to as much as €300 million. This transaction marks the seventh tranche of Ferrari's extensive share repurchase program, which was initially valued at approximately €2 billion and announced during the Capital Markets Day of 2022.
The company will buy the shares at the determined price from the Exor offering, as part of the 10% maximum share buyback mandate approved by shareholders on April 17, 2024. This mandate allows the company to repurchase its shares within 18 months of the approval.
Ferrari has financed this latest repurchase using its cash reserves, ensuring it can continue to execute its strategic plans without hindrance. The transaction is expected to be settled on March 3, following Exor's bookbuild.
The share repurchase initiative demonstrates Ferrari's commitment to enhancing shareholder value. "This significant investment underlines our confidence in Ferrari’s strategic direction and long-term growth prospects," stated Ferrari’s spokesperson.
Before this announcement, Ferrari completed the sixth tranche of its share buyback program, investing €150 million to purchase over 300,000 shares on the Euronext Milan and the NYSE. The average purchase price for those transactions was approximately €484.70 per share on the Italian market and around USD 501.93 per share on the New York Stock Exchange.
Post the sixth tranche, Ferrari accumulated approximately 15,119,211 ordinary shares, representing about 5.88% of its total issued share capital. Since the initiation of the buyback program, the company has repurchased 4,296,447 shares, with concentrated efforts reflecting Ferrari's sustained commitment to return capital to shareholders.
Investors have reacted to Ferrari's proactive approach favorably. Following the announcement, shares of Ferrari experienced significant activity, with analysts observing fluctuations stemming from market sentiment and speculative trading.
These buyback programs serve not only as strategic financial maneuvers but also impact public perception, reaffirming Ferrari's position as a solid investment choice among luxury brands. Investors are closely monitoring performance as the market anticipates the full integration and effects of the share repurchases.
Industry experts highlighted the importance of such buyback initiatives, especially within luxury automobile sectors, where manufacturer confidence can influence market dynamics. Under normal circumstances, share buybacks can bolster market liquidity and potentially raise stock prices, benefiting both current and prospective investors.
Ferrari's repurchase strategy fits within broader corporate trends, where companies are increasingly using share buybacks as tools to manage equity and incentivize shareholders. Historically, this trend is often seen during periods of financial stability and growth potential.
Looking forward, analysts predict Ferrari will continue to engage with its shareholder base as it navigates its strategic goals and market conditions. The continued execution of share buybacks could align with future investment opportunities or expansions, maintaining investor interest.
Ferrari’s last reported action indicated total investments of approximately €1.32 billion since the program's inception. This culminates to solid financial backing, allowing for continued operations without strain on cash flows.
Overall, the successful implementation of the repurchase reflects Ferrari's adjusted focus on shareholder interests, with strong cash flows underpinning future endeavors.