Fiat interested in listing Ferrari

Ferrari is undoubtedly the world’s most revered automotive brand. With its portfolio of exotic supercars and the oldest F1 team, the Prancing Horse badge is valuable.

Exactly how valuable, though, remains a point of conjecture. Especially as Ferrari is part of the Fiat group organogram and not a standalone company with a separate listing.

Fiat’s enigmatic CEO Sergio Marchionne estimates Ferrari to be worth around $7.3-billion – quite a lot for a company that squeezed only $430-million profit on total sales of $2.73-billion through 2010.

Why would Marchionne be talking about Ferrari’s value as a listed share? Well, Fiat has debt issues, especially as it prepares to assault the American market and carry its Chrysler acquisition. To resolve some of the Fiat debt, Marchionnne has been mulling over the idea of listing Ferrari, which banks value more conservatively at $4.3-billion.

At a value-to-earnings ratio of 17:1, is Marchionne being rampantly optimistic? Well, considering Ferrari can charge car prices for a book chronicling the brand's history and Marchionne's value calculations appear to be not at all inaccurate.

More important are the possible risks. A Ferrari listing could increase long-term exposure for a hostile takeover by VW (which owns Lamborghini already) as the Germans are always keen to acquire a brand with unlocked value potential.