CEO Valerio Battista’s vision of being at the helm of an international public company was explained in a recent interview with a primary financial daily.
Prysmian Group can, in fact, be defi ned as a truly public company as it has no majority or control shareholder. Only two investors exceed the threshold of 2% of the equity capital, Clubtree and Norges Bank, while the company’s employees own an approximate 1% interest, with the remaining spread in the hands of a number of institutional and private investors. But, Battista noted, at Prysmian, “Control is exercised not only on the basis of the number of shares, but also through results and the fact that all shareholders follow you.”
Despite its widely held shares, the company’s management has remained stable since its initial listing in the Milan Stock Exchange in 2007. “It is impossible to protect against a possible attempt to take over a company,” Battista explains. “If the interests of all stakeholders are respected, then the problem of sale to third parties is not an issue. A public tender off er would also create value.”
In Italy, family-owned companies represent over 70% of all businesses. When asked about the advantages of being a public, rather than family-owned, company Mr. Battista noted that this is a very Italian issue: “It poses succession problems that may result in less-than-optimal leadership of the company. If the entrepreneur lacks the foresight to create an adequate succession process within the family, he or she must have the courage to pass the sceptre to someone from outside the family.”
The commitment of Prysmian to Italy was confi rmed recently with the decision to stay headquartered in Milan, in a new building located in the heart of the high-tech district of the industrial capital of the country.
The deal confirmed the strength of the Prysmian equity story.
Investors fully subscribed the issue of a €500 million convertible bond by Prysmian Group, which was zero-coupon and with a fi ve-year maturity. The initial price for the conversion of the bond into ordinary Prysmian shares will be €34.2949, representing a 41.25% premium above the volume-weighted average price of Prysmian ordinary shares on the Milan Stock Exchange between launch and pricing.
“We have successfully completed an important transaction which allows us to carry out a meaningful share buy-back, while retaining full fl exibility to pursue potential external growth opportunities,” explained Pier Francesco Facchini, Prysmian’s Chief Financial Offi cer. He added that “the terms of the transaction are very competitive, confi rming the strength that Prysmian’s equity story maintains despite a highly volatile macroeconomic environment.” The bond can be converted into ordinary shares, subject to the approval by the Company of capital increase with exclusion of preferential subscription rights to be reserved solely for the service of the conversion of the bond itself. After such approval by the General Meeting, the Company shall issue a notice to Bondholders. The Company shall then settle any exercise of conversion rights in Prysmian ordinary shares issued pursuant to the capital increase or, at the Company’s sole discretion, existing Prysmian ordinary shares already held.
Should the Capital Increase not be approved and should the Company not publish the notice, each bondholder may request the early redemption in cash. The Company will have the option to call all but not some only of the outstanding Bonds at their principal amount from 1 February 2020, should the value of shares exceed 130% of the conversion price for a specifi ed period of time.
The net proceeds from the Bond issue will be used to: pursue the Company’s potential external growth opportunities, fund share repurchases, or for general corporate purposes. BNP Paribas, HSBC, JP Morgan, Mediobanca and UBS acted as Joint Global Coordinators and Joint Bookrunners of the offering.