A HISTORICAL GAFFE: THE SEA IPO TOWARDS THE “FLOP”. ONLY LEGAL DISPUTES TAKE OFF FROM MILAN
The hypo of Sea is heading, barring sensational twists, towards a resounding flop.
With books now closed, it seems obvious that the orders received from the banks in charge of the placement under the direction of Mediobanca are far from the objectivesin terms of quantity and price.
It is therefore not difficult to predict that the afternoon meeting between bankers and management of the Milan airport company will be turbulent. More difficult to guess a possible surprise move to avoid a "lean" destined to remain in the annals of international stock exchanges.
The cause before the flop is undoubtedly the sensational one public dispute between the selling shareholders, primarily the Municipality and Province of Milan, and the F2i Fund, owner of 29,5% of the share capital. It is no coincidence that Giuliano Pisapia, mayor of Milan and renowned lawyer, is already sharpening his weapons. “We are awaiting the final outcome – he commented in the morning – It is certain that in the face of this great interest in listing, which is the most transparent tool there is, if the news that has appeared in the newspapers correspond to reality, I believe that those who have attempted to disturb the market and have made unfounded appeals will assume full responsibility in the event of failure".
In short, according to the mayor, the fault of the flop lies entirely with F2i, who took the field publicly to challenge the claims of Sea's management on the occasion of the road show. The SEA advisers appointed by the Fund have raised doubts on the traffic trend, on the enforceability of receivables from some companies and contested the promise of a 50% pay-out ratio, a guarantee of "a dividend higher than a BTP" as promised by the president Giuseppe Bonomi.
A controversy that resulted in a supplement to the information prospectus in which, probably at the invitation of Consob, it is noted that "according to what it learned after the publication of the prospectus, a situation of conflict is underway between the controlling shareholder, the Municipality of Milan, and F2i”. A loose cannon that can lead to a devastating stalemate because "it could give rise - continues the supplement - to a divergence in the position of the same on some decisions of an extraordinary nature subject to one of the qualified majorities' and consequently 'the non-adoption by part of the competent corporate body of such decisions, with possible negative effects on the pursuit of the objectives of the company and of the Sea Group”.
It is not surprising, in this context, that a large part of the investors ran away. And that a large part of those who have confirmed their interest, have demanded a discount motivated by the "risk of scuffle". But Sea, faced with suggestions to that effect from the banks, was neither able nor willing to adapt. Among the reasons that prompted SEA to accelerate the launch on the market by 2912, despite the climate of conflict between the shareholders which did not bode well, there are the financial needs of the public shareholders: the province of Milan, in particular, it needs to raise cash to close the 2012 budget, under penalty of overrun which, pursuant to the stability pact, will have as an immediate consequence, the ban on President Guido Podestà from standing again in the next elections.
AEven the tenacious opposition of Vito Gamberale, president of F2i, has a financial motivation: the Fund entered SEA on the basis of a valuation of 1,3 billion against a placement price of the securities between approximately 800 million and 1 billion. The IPO, therefore, was destined to cause a loss (albeit theoretical) of around 100-150 million. But now? Beyond the possible financial remedies, the reality of a very serious conflict between the partners remains. It is the shadow of an unprecedented flop that affects both the Municipality, governed by a left-wing junta, and the Province, a stronghold of the centre-right.
Beyond the whirlwind of accusations, the whole thing smells like a big approximation. For multiple reasons:
- The F2i fund is a relatively recent partner for Linate and Malpensa, which negotiated its entry with the current local administrators. Is it possible that, on that occasion, the strategic evolution of the alliance was not discussed?
- It is certainly not uncommon for prominent partners to split over strategic issues. But common sense dictates that the deal or rift be played out at home, not in the public square at a stock offering.
- The reason that prompted SEA to force the timing of the IPO on the indications of the public shareholders stems from logics that have nothing to do, given the final result, with social interest. The only reason for the urgency lies in the political delays. The Province of Milan, among other things, saw the auction for the sale of the controlled package in Serravalle go deserted, an operation prepared with the help of a crowd (a few dozen) of consultants. Now we risk a final in red.
- Piazza Affari is starting to close a difficult year, with a round of trading in free fall, with an historic low. And a queue of endless controversies. In municipal circles, for example, there are also those who underline the potential conflict of interest for Unicredit and Intesa Sanpaolo, at the same time bookrunners of the placement (i.e. those who had to collect investors' orders) and major sponsors of F2i, which listing of the Sea would have suffered a capital loss of more than 100 million euros.
- And now? It is unlikely that a decision will be made for an extension of the IPO, also because the rift between the shareholders has become even more profound. It is possible that the Province, in order to make ends meet, resigns itself to a strong discount on the Serravalle package, the latest legacy of the purchases made at the time by the Penati junta.
