MILAN Nov 16 Two Italian private equity funds
are in talks about investing in
a holding company that jointly owns Pirelli, people
familiar with the situation said on Friday.
The funds, Investindustrial and Clessidra, will be working
on a potential deal this weekend but are unlikely to reach an
agreement by Monday, the sources said.
Pirelli chairman Marco Tronchetti Provera controls the
tyremaker through a complex structure involving three
interlocking holding companies: MTP Sapa, GPI, and the
The two funds would invest 40-60 million euros in Tronchetti
Provera's family holding MTP Sapa.
That would in turn allow Tronchetti Provera to subscribe to
a capital increase in GPI, enabling him to keep control of
Pirelli, the world's fifth-largest tyremaker with a market
capitalization of 3.96 billion euros.
"They are in talks," said one of the people. "They will be
working on it all weekend, but Monday is a bit too soon for
anything to be signed."
A second source described the situation as "fluid".
"Not all the details are in place, there are a few aspects
still to sort out. It's hard to imagine them wrapping it up by
Monday," the source said.
GPI declined to comment. Pirelli was not immediately
available for comment.
GPI approved a capital increase of 45 million euros in
September to repay bank debt of 41 million euros coming due in
Tronchetti Provera has a 55 percent stake in GPI through MTP
Sapa and the cash injection from the two funds would ensure that
his holding does not get diluted by the cash call.
Italian companies including Fiat, Mediaset,
and CIR are also held through unlisted holding
companies, which enables families to control listed companies
with a smaller amount of capital than they would need for a
The funds' investment foresees: "a streamlining of the chain
of holding companies, from both a financial and a governance
point of view," one of the sources said.
The other investor in GPI is Malacalza Investimenti with a
30.94 percent stake.
(Reporting by Massimo Gaia, writing by Jennifer Clark)