Last week, Sichenzia Ross Friedman Ference LLP Partner Gregory Sichenzia spoke to James Fontanella-Khan and Nicole Bullock of the Financial Times on the latest controversy surrounding the major Italian sports car manufacturer Ferrari S.p.A’s upcoming IPO. Ferrari had to recently correct remarks regarding the initial public offering that were made by UBS’s Chief Executive Officer Sergio Ermotti. According to SEC regulations, companies have to abide by strict rules regarding public statements made during their IPO “quiet period”.
Mr. Sichenzia was asked whether or not Mr. Ermotti’s remarks would negatively affect Ferrari’s IPO to which the SRFF Partner responded: “The guy was talking off his cuff,” said Gregory Sichenzia, a partner at Sichenzia, Ross, Friedman, Ference. “Obviously, he should have kept his mouth shut but realistically I don’t see it affecting the offering.”
Read the full article here or view the transcript below:
Red Faces as Banker Revs Up Ferrari IPO
Sergio Ermotti is leading by example. The chief executive of UBS recently made headlines with his assertion that bankers should be allowed to make honest mistakes. Two weeks on, the chief executive of Switzerland’s biggest bank has served up a prime example.
Ferrari, the sports car maker preparing to list on the New York Stock Exchange, was this week forced to correct the Swiss investment banker in an official statement to the US market after he spoke out of turn about the hotly anticipated initial public offering.
A Securities and Exchange Commission filing on Friday showed that the company intended to price the offering of almost 17.2m shares, or 9 per cent of its equity, in a range of $48-$52 per share. At the top of the range, that would value Ferrari at almost $10bn.
But in a separate document filed with the SEC on Wednesday, Ferrari said Mr Ermotti had told Bloomberg and Adnkronos, two news agencies, that the listing marked “un grande momento” for the carmaker.
Mr Ermotti, who was speaking on the sidelines of a conference in Milan, added that it was “almost impossible to think that [the] Ferrari IPO can’t be successful”. UBS is one of the bookrunners on the listing.
The SEC has strict rules on what can and cannot be said publicly in the “quiet period” — the time from when a company files its registration statement with the regulator until SEC staff declare the registration “effective”. Any violation is viewed as “gun-jumping”.
Ferrari, which is being spun off by its owner Fiat Chrysler Automobiles, filed its registration document on July 23.
UBS refused to answer any questions about the situation. “There is no need for comment, as the existing filing contains all the necessary and relevant information,” the bank said on Friday evening. UBS would not confirm whether Mr Ermotti was personally involved in marketing the Ferrari offering.
“The guy was talking off his cuff,” said Gregory Sichenzia, a partner at Sichenzia, Ross, Friedman, Ference. “Obviously, he should have kept his mouth shut but realistically I don’t see it affecting the offering.”
At the very least, the episode will cause red faces at UBS, one of Switzerland’s proudest banking institutions. Mr Ermotti is thought to be taking a keen personal interest in the listing, the sort of mandate it would use to lure prospective clients.
“It’s a huge deal — a huge name, a cross-border transaction,” said one legal expert, who added that bankers are explicitly told not to overstep the mark in any public statements. “I suspect [Mr Ermotti] wasn’t thinking about all those comments the lawyers told him at the start of the transaction.”
Mr Ermotti’s comments, made at the start of this month, came against the backdrop of an uncertain market for global equities and the Volkswagen emissions scandal, which has rocked carmakers’ shares worldwide.
The SEC, which declined to comment on the matter, has been cracking down on pre-listing disclosures.
Ferrari’s filing is in the form of a free writing prospectus, which is commonly used in the US as a way for companies to add supplementary information to their offer documents. But such filings are rarely used to clarify excited comments by advisers.
In 2004, before the US listing rules were changed, Google was forced to include in its prospectus the entire contents of an interview given to Playboy magazine by founders Larry Page and Sergey Brin. Their comments had included the number of people using the search engine at the time.
Fiat Chrysler declined to comment beyond Ferrari’s market filing, which said: “Mr Ermotti’s statement was solely intended to indicate that the completion of the proposed offering would be a significant event for Ferrari. These statements were not intended to refer to the company’s business or any other aspect of the transaction.”
Reporting by Andy Sharman and Laura Noonan in London, James Fontanella-Khan and Nicole Bullock in New York and Gina Chon in Washington.
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