As we initially suggested on this blog and published on Dow Jones Investment Banker, as well as in The Source on WSJ.com and in The Asia Wall Street Journal, Prada confirmed on 7 March on Bloomberg its decision to conduct its proposed IPO with a sole listing in Hong Kong, at the expense of Borsa Italiana, the Milan Stock Exchange.
We argued at the time that a listing in Asia would make sense since almost 40% of the group’s consolidated sales (and an even higher proportion for its Miu Miu brand) are made in Asia. We also said that this would enable it to capitalize on the increasing purchasing power of China’s middle class. We further argued that a dual listing in Milan would dilute the message and Prada’s positioning as an “Asia-focused” brand.
It appears that CEO Patrizio Bertelli has made up his mind as the IPO and listing have now been formally confirmed. The news come as several companies have pulled their proposed flotations and listings in Milan. Enel Green Power’s US$3.5 billion IPO last November, the country’s largest for more than a decade, had a difficult start, although the company’s share price has since recovered and is now trading some 7% above the offer price.
The proposed listing of Prada was made possible by a change in the listing rules for the Stock Exchange of Hong Kong, which now allows listings by companies incorporated in 15 jurisdictions, including Italy.
The news, however, must still be treated with caution – this would be Prada’s fifth attempt to go public.