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Will Il Sole shine? Last week the board of Il Sole 24 Ore, the publisher of Italy’s most influential business daily, confirmed plans to take it public in October or early November, market conditions permitting.
Despite concerns about the decline of traditional print media, the offer has its attractions. The paper is one of the most resilient performers in Italy: subscriptions account for just less than half of its 347,000 daily circulation, well in excess of the 6 per cent industry average. And there could be pent-up demand: it is the first publisher to list since Caltagirone Editore made its debut seven years ago.
The difficulty will be pricing. Italian investors have been hard to read of late. Aeffe, the fashion house, slipped 10 per cent in its first two days as a public company last month, having priced at the bottom of its indicative range. Enia, the utility admitted to Milan’s blue chip segment a fortnight earlier, went the other way, shooting up 9 per cent in 48 hours. Recent sector deals do not provide much of a steer either. Rupert Murdoch’s acquisition of Dow Jones – at a heady 40 times 2007 earnings – or Pearson’s agreed sale of Les Echos to LVMH, at about 24 times, were both priced way beyond Il Sole’s putative peer group of RCS, Mondadori and CIR, which trade between 14 and 20 times.
Another wild card is Il Sole’s owner, Confindustria, a vast grouping of employers’ associations spanning construction, transport and tourism, which will retain a 67.5 per cent stake after floating the rest. Il Sole will be the federation’s only public holding: the fact that it does not have to worry about meeting return on equity targets will make it either a very good, or a very bad, co-shareholder.