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Revived scootermaker Piaggio speeding toward IPO

"We have a strong young boy who is now ready to walk on his own."

Roberto Colaninno, owner of Immsi SpA, which bought Piaggio in 2003

Nothing on wheels more personifies Italian style than the Vespa scooter, whose carefree spirit was immortalized by Audrey Hepburn and Gregory Peck circling Rome's piazzas in the 1953 film Roman Holiday.

The Vespa's familiar curved frame has a found a place in design museums and in the hearts of Europeans, who first hopped aboard simply to get around after World War II and who still cling dearly to its handlebars as they zip through clogged streets.

Now, as the Italian icon turns 60, the company that makes the Vespa is about to go public.

The move is a sign of Piaggio & C SpA's return to health after being rescued from the verge of collapse by Roberto Colaninno, the former Telecom Italia chief executive whose holding company Immsi SpA bought Piaggio in 2003 and brought the company to record sales in two years.

Public debut

"The IPO is the conclusion of the rescue started at the end of 2003, and the result of agreements signed at the moment of the decision to save the company," Colaninno told reporters on Tuesday after presenting the company's portfolio to potential investors.

"We have a strong young boy who is now ready to walk on his own," he said.

Europe's largest scooter-maker by revenue, Piaggio is selling a 31 percent stake raising between 274 million euros and 348 million euros (US$346 million and US$440 million) during an initial public offering that ends on July 5. Shares are priced in a range of 2.30 euros to 3.00 euros, valuing the company at between 886.8 million euros and 1.16 billion euros.

Final pricing will take place on July 10, and the stock market debut is scheduled for July 11.

Immsi, the controlling shareholder, has already increased its stake to 49 percent before the offering and intends to raise its share to between 56 percent and 58 percent by the end of the IPO, Colaninno said on Tuesday, giving Piaggio a long-term industrial shareholder.

The sale capitalizes on Vespa's carefree image as much as fundamentals: Piaggio posted a net profit in the first quarter of this year of 10.2 million euros on revenue of 374.2 million euros, compared with a loss of 10.2 million euros a year earlier.

Cool image

An investor should be someone "who believes in a product that is a combination of technology, beauty, style, dreams and sport," Colaninno said. "We're not just about transportation, but about a particular concept of transportation, stylish, fun and luxurious."

Piaggio was founded in 1884 by Rinaldo Piaggio, a maker of ship interiors who later designed airplanes and helicopters. But the success of the Vespa, introduced in 1946, put the company's future firmly on the road.

The Vespa, paradoxically, was created for those who disliked motorcycles. Inspired by a woman's bicycle, the open design makes it possible to mount the Vespa without raising a leg and allows well-heeled women to sit easily behind the handlebars, where controls for the accelerator, clutch and brakes are located.

While the Vespa remains Piaggio's most recognized product, the firm now has seven well-known scooter and motorcycle brands. Next month, the world's first three-wheel scooter, the Piaggio MP3, will go on sale in Europe.

Global ambitions

Piaggio aims to be multinational, with operations targeting vastly different markets with selected products, Colaninno said.

Toward that goal, Piaggio has expanded into India, where Colaninno estimated it would take 50 years to fully exploit the market, and into China, through a joint venture with Zongshen in 2004.

The company also was considering entry into Brazil, South Africa and further into Asia.
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