Fiat confirmed last week that plans for an Ferrari IPO have now been completely shelved and that the deadline for it to repurchase Mediobanca's stake in the sportscar maker has been put back to September.

Fiat and Ferrari President Luca di Montezemolo revealed last Wednesday in Rome that any lingering plans for a Ferrari stockmarket listing had now been completely abandoned. "It's official that we won't be listing it," the ANSA news agency reported him as saying. The plans have simmered ever since Fiat sold a 34 percent stake on Ferrari to Mediobanca in 2002 with the Italian bank charged with preparing their stake for an IPO. However during the intervening period strategic priorities for Fiat have completely changed, not least has been the recovery of the carmaker in the marketplace by the end of 2005 somewhat negating the need for it to raise cash. Another factor has been that Ferrari President Luca di Montezemolo, an original driving force behind an IPO, has since the 34 pct stake was sold been promoted to Fiat Group Chairman.

Fiat CEO Sergio Marchionne has recently made clear that the Ferrari sportscar division is an integral part of the Group's long-term plans and that repurchasing the 34 percent stake is now a priority for him. When Mediobanca bought the shares in 2002 (for 775 million euros) Fiat were given an option until 30th June 2006 to repurchase the entire stake for the original price plus interest. However this week has come news that has now been extended for three months, giving Marchionne until 30th September to resolve this issue.
 

Into the equation comes the minority stakes that the Fiat Group and Mediobanca hold in each other, and which are now expected to be sold as part of any deal. Fiat hold 1.8 pct of Mediobanca stock, and along with Pirelli and Telecom Italia (who both hold 1.9 pct), are part of a shareholder pact that prevents them from selling the stakes until next year. All three industrial groups are reportedly keep to divest themselves of their investments while at the same time Mediobanca has recently announced that it no longer sees its own 1.9 pct investment in Fiat stock as being strategic.

Yesterday the Reuters news agency reported that Italian businessman Gilberto Benetton had met Mediobanca General Manager Alberto Nagel and Director Renato Pagliaro last Thursday to discuss the Benetton family's investment vehicle, Edizon Holding, buying a stake in the bank of up to 2 pct, which would be worth 240 million euros at today's prices. Benetton already own a small stake in Mediobanca. "They discussed the possibility of (Benetton) joining Mediobanca's shareholder pact," Reuters quoted a source of saying about the meeting.