MILAN – Traders of Fiat shares are bracing for a “crazy” day today, when investors assign their first value to the two stocks formed from the biggest reorganization in the carmaker’s 111-year history.
Fiat Industrial, the new company whose main assets are truck and tractor makers Iveco and CNH Global, may reach 9.4 euros, or $12.47, on the Milan exchange today, according to the average estimate of analysts compiled by Bloomberg.
Meanwhile, Fiat stock may trade at 6.65 euros – $8.83 – the estimates show, implying the two stocks combined would be 7.1 percent more than the old Fiat’s close of Dec. 29.
Both Fiat and Fiat Industrial will be prone to swings on the first day because the carmaker hasn’t given an indication of the stocks’ valuation, and Fiat’s profit forecasts don’t take into account its stake in Chrysler Group. The Italian company, with a market value of $24 billion as of Dec. 29 and whose first car was the 4- horsepower developed in 1899, had gained 44 percent since announcing the spinoff on April 21.
“I don’t remember an operation of this type in Milan, especially for a big cap like Fiat,” said Alessandro Capuano, the head of the Italian trading desk for IG Markets in Milan, who has been tracking equities the past six years. “It’s not a classical IPO. It could be a highly volatile trading day.”
Investors are getting one share of Fiat Industrial for every Fiat share they hold. The Milan exchange doesn’t plan to take orders in the pre-opening auction phase today, said Nunzio Visciano, head of listings at Borsa Italiana.
The exchange conducted a simulation with traders Dec. 16 to rehearse the debut, which will coincide with the first day of trading on the bourse in 2011.
“It’s going to be a crazy day with shares dancing up and down and several suspensions,” said Alessandro Frigerio, a fund manager at RMJ Sgr in Milan, who sold Fiat stock earlier this year. “We’ll wait a few days before deciding if we would buy.”
Fiat acquired a 20 percent stake in Chrysler in June 2010 and hopes to foster more auto alliances. Its remaining assets after the spinoff include the Maserati and Ferrari brands.
