Case Name :      Prada: To IPO or Not to IPO: That Is the Question

Authors :           Stephen Sapp

Source :             Ivey Publishing

Case ID :            W1215

Discipline :        Finance

Case Length :    19 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

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.