The Fiat Group share price surged by almost 10 percent today on the Milan Bourse as rumours spread that further asset disposals were planned, possibly surrounding the Iveco trucks-and-buses division, leading to Fiat issuing a statement denying any plans for further sales. The asset sale speculation comes just a week before the Group's third quarter financial results are due to announced and ahead of an investor presentation scheduled to take place at Balocco early next month.

"With reference to today's increase in the Fiat share price and the significant volume of shares traded on the market, Fiat states that it has no information that could explain this performance," said the statement issued by Fiat in Turin this afternoon. "In particular, with regard to rumours on possible divestitures, no significant assets are being sold nor are expected to be sold, except for those activities that have already been disclosed to the market.

"As for forthcoming corporate events, on the basis of a calendar previously communicated to the market, the Fiat Board of Directors will meet on Thursday October 26 to review Group consolidated results for the third quarter of 2006, while a meeting with the financial community is scheduled to take place in Balocco on November 8 and 9 to illustrate the Group's situation and provide an update on the industrial plan with details regarding objectives until 2010," the statement concluded.

The focus of speculation today centred around plans for Fiat Iveco division. "There is speculation the company may sell its truck unit,'' Bloomberg reported Francesco Vercesi, a hedge-fund manager at Cartesio Alternative Investments in Milan as saying. Italian brokerage Intermonte Sim SpA raised its target price on the stock to 18 euros from 14 euros, citing a positive outlook and possible "extraordinary operations aimed at exposing the real value of assets such as Iveco, CNH, Components, Ferrari, still undervalued by the market at the moment," in the next 12 to 18 months, Bloomberg also reported.
 

With annual sales exceeding 9 billion euros, 31,000 employees and approximately 800 dealers all over the world, Iveco (Industrial Vehicles Corporation) is now one of the world’s largest manufacturers in the transport sector.  The group operates through the Iveco, Iveco Motors, Iveco Magirus, Astra, Seddon Atkinson and Irisbus brands. Iveco has a low cost manufacturing base and produces a comprehensive range of products including light vehicles (2.8 – 6 tonnes GVW), medium (6 – 16 tonnes GVW) and heavy (over 16 tonnes GVW) commercial vehicles for use on and off the road; engines for vehicle and industrial applications; passenger transport vehicles; special vehicles and fire fighting vehicles. Iveco has 49 manufacturing plant and 15 research and development centres spread through 19 countries dotted over five continents. It operates in over 100 through joint ventures, licensees and participating investments countries, with a major current focus being to break into the rapidly-growing Chinese market. With an excellent cost base, Iveco is currently very undervalued by investors and any sale could realise a significant return.

Current market speculation surrounds a major consolidation in the European truck manufacturers sector, with German giant MAN AG kicking off the furore by having recently made an unwelcome takeover bid for Scania AB, Sweden's second-largest truck maker. Scania are fiercely resisting the plans but the key to the deal lies with the VW Group who is a major shareholder in both companies and makes no secret of the fact it would like to see a merged entity which would become at a stroke Europe's biggest truck maker. VW on Monday told the two companies to come up with an "amicable solution" within four weeks.