Milan-based tyre manufacturer Pirelli & C. SpA (IT:PIRC) is getting a boost from ex-CEO Marco Tronchetti Provera’s increased stake in the company. Tronchetti Provera’s investment firm Marco Tronchetti Provera & C. SpA (MTP), along with Camfin SpA, a holding company controlled by Tronchetti Provera, will increase its stake in Pirelli to 20% from the current 14%. PIRC shares were trending higher by 3.5% on the news as of writing.
Pirelli is an Italian multinational tyre manufacturer. It is a key supplier to supercar manufacturers and also a partner in the coveted Formula One Racing. PIRC shares have gained 14.7% in the past year.
Details About the Increased Stake
Tronchetti Provera served as the CEO of Pirelli for over 30 years and stepped down in 2023. Even so, he is the executive vice-chairman of Pirelli’s board and holds a significant say in the company’s decisions. Following the two-stage stake increase, Italian investors, including MTP, Camfin, and Brembo SpA, will hold a total of 26% of Pirelli’s voting rights. Meanwhile, the largest shareholder in Pirelli is Chinese chemical giant Sinochem, with a 37% stake.
Despite being the largest shareholder, Sinochem is facing a dispute with Pirelli’s stakeholders and the Italian government owing to its Chinese roots. In June 2023, Prime Minister Giorgia Meloni’s cabinet directed Sinochem to withdraw some of its voting rights in Pirelli and stopped it from appointing the company’s CEO. Moreover, the cabinet prevented Sinochem from accessing the data from Pirelli’s proprietary technology, considered vital to the company. The government is concerned about having any Chinese influence on the Italian manufacturer.
Is Pirelli a Good Stock to Buy?
With four unanimous Buy ratings, PIRC stock commands a Strong Buy consensus rating on TipRanks. Also, the Pirelli & C. SpA share price target of €5.63 implies 9.6% upside potential from current levels.
