Exor Crystallising Value In Ferrari To Make Way For New Acquisition & SBB

Exor announced that it will sell ~6.7m common shares (3.61% of total shares) of Ferrari, via an accelerated bookbuild offering to institutional investors, for total proceeds of ~€3.0b. The shares are being offered at €450.0ps and the transaction is expected to be completed by 3rd March'25. Post transaction, Exor's stake in Ferrari will decline from 22.91% to 19.47%. Exor guided that the proceeds will be used to introduce a new investment withing the portfolio and execute a €1.0b SBB program. While we didn't expect management to reduce their stake in what we see as the crown jewel within Exor's portfolio, we welcome a new investment within the portfolio which would help diversify away from Ferrari, which made up ~52% of NAV. Post transaction, we estimate Ferrari to make up ~44% of Exor's NAV. As for the new investment, we think it will mostly be a listed name within the healthcare, luxury or technology sectors. We estimate NAVps and TEVps to be €191.9 and €200.2, implying discounts of 51.1% and 53.2% respectively. We reiterate our BUY rating and €120.0 TP.