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Prada: To IPO or Not to IPO: That Is the Question
內容大綱
Prada currently requires a significant amount of capital both to re-finance debt that is maturing in the next six to twelve months and to finance its intended growth into the Asian (especially Chinese) markets. Since financial markets are aware of Prada’s pressing need to raise capital, it is important for the board of directors to develop a credible strategy for raising the necessary capital of at least €1 billion. Although the press has been suggesting that Prada will do an initial public offering, the company has tried this several times in the past with no success, mainly because of bad timing (9/11, the SARS outbreak, and the ongoing global financial crisis and European sovereign debt crisis). The board has approached Guido Santini of the investment bank Grupo Capo Milano to come up with a number of credible alternatives and a strategy for raising the needed capital.
學習目標
This case is designed to provide students with an opportunity to evaluate some of the wide variety of financing tools available to firms in global financial markets. The case deals with Prada’s pressing need to raise a significant amount of capital. Although it is widely speculated that Prada will raise capital through an IPO, the fact that this is not the first time an IPO has been planned leaves the discussion of the pros and cons of the different alternatives open. The case takes the position of investment banker Guido Santini, who is tasked with coming up with multiple alternatives to propose to the board. He cannot just propose one alternative given Prada’s past experiences with raising capital, so he needs to rank several alternatives. The case provides ample background on different debt and equity options in Europe, North America, and Asia.