TURIN – French group Bollore S.A. is emerging as the most likely bidder for Italy's struggling automotive design and engineering specialist Pininfarina S.p.A.
Vincent Bollore told Reuters Monday that he is ready to invest 30 million euros ($40 million) to buy a 30 percent stake in Pininfarina.
Bollore is CEO of the 6 billion euro investment, industrial, logistic and media group that bears his name.
Pininfarina confirmed that Bollore has sent a non-binding letter of intent to Banca Leonardo, an Italian merchant bank that seeks a buyer for a 76.1 percent stake of Pininfarina owned by creditor banks.
Rival bidder Magna International Inc. has dropped out, and Beijing Automotive -- which reportedly was eyeing a Pininfarina bid -- denies any interest.
Bollore says it will not exceed a 30 percent stake in Pininfarina. “We always said we are ready [to buy a 30 percent stake], but no more than 30 percent,” Bollore told Reuters.
Italian stock market rules require an investor to buy all the shares in a listed company when its stake exceeds 30 percent. Pininfarina is listed on the Milan stock exchange.
Fueled by rumors of a bid, Pininfarina shares have risen from a low of 1.63 euros on July 26 to 7.77 euros in recent trading.
Four years ago, Bollore and Pininfarina formed a 50:50 joint venture to build electric vehicles and planned to invest 150 million euros to make a four-seat car designed by Pininfarina and powered by Bollore's lithium ion batteries.
Pininfarina and Bollore both clashed over strategy -- a fight triggered by diverging EV subsidies in France and Italy -- so production didn't begin.
The French group views its proposed stake in Pininfarina as a pure investment -- not as a tactic to revive its EV project. “The stake in Pininfarina would be part of the Bollore Group investment portfolio activity,” a source close to the matter told Automotive News Europe.
Bollore Group manages investments worth about 2.2 billion euros.
Magna International Inc., the Canadian supplier that had sought to buy Pininfarina, withdrew its bid late last month, a person familiar with the matter told ANE. It is unclear why Magna International's Austrian subsidiary Magna Steyr gave up its quest to buy Pininfarina.
Beijing Automotive Industry Holdings Co. (BAIC), China's fifth-largest automaker and a customer of the Italian firm, also was rumored to be interested in Pininfarina. In 2010, BAIC hired Pininfarina to conduct design studies for a new range of vehicles based on tooling and technology of two older Saab models, the 9-5 and 9-3 sedans.
BAIC had purchased the tooling and technology in 2009. But BAIC denies any interest in the Italian design firm. “We have no comment because we never placed [a bid],” a BAIC spokesman told Automotive News China last month.
Pininfarina was founded 80 years ago by Battista Pininfarina, the grandfather of current chairman Paolo Pininfarina. Known for building legendary sport cars such as the 1966 Alfa Romeo Spider and the 1984 Ferrari Testarossa, Pininfarina has struggled financially for years. From 2007 to 2009, its cumulative net losses totaled 358 million euros.
For the first nine months of 2010, the company reported a net loss of 34 million euros. For the full year, Pininfarina expects flat sales and a larger net loss.
In 2009, Pininfarina hired Banca Leonardo, a Milan-based merchant bank, to sell a 50.7 percent stake held by Pincar, the Pininfarina family's holding company.
The banks now hold a 76.1 percent stake in the company, while the Pininfarina family's share has shrunk from 55 percent to just 1.2 percent. The banks, which have canceled loans worth 250 million euros, will receive the proceeds from Pininfarina's sale.