16 May 02. Marconi plc (Nasdaq: MONI; London) today announced a planned initial public offering (“IPO”) on the Milan Stock Exchange of its Strategic Communications business (“the Company”), part of Marconi Mobile. There are three units remaining within Marconi plc include the Private and Public Mobile radio businesses. The Strategic Communications business designs, manufactures and supplies communications and information systems, primarily for defense and security applications, including ground, naval, avionic communications/command and control systems. The company employs approximately 4,000 people in Italy, the United Kingdom, Germany and Turkey and, in the financial year ended March 31, 2002, had sales of approximately £300m, an increase on the previous year of some 17 percent. The company won the BOWMAN hand-held radio contract and is currently bidding the MoD Falcon communications requirement.
Commenting on today’s announcement, Strategic Communications’ Chief Executive Remo Pertica said: “Strategic Communications’ record of successful growth and service to its customers over many years now enables the Company to seek an independent stock market listing. We look forward to continuing to build on our long established partnerships, both in Italy and internationally, between Strategic Communications, its customers and employees.”
Mike Parton, Chief Executive of Marconi plc, said: “This is a logical step which will position the Strategic Communications business and its people for the next stage of development. For Marconi plc, it is a continuation of its increasing focus on its core telecommunications equipment and solutions business.”
Further details regarding the IPO, including Strategic Communications’ post-IPO capital structure, and the offer timing and plan of distribution, will be announced in due course.
Comment: This announcement comes as a surprise given that Marconi had announced that it was searching for a trade sale to a number of companies including EADS, Thales, General Dynamics and Finmeccanica. Sources had suggested that Finmeccanica was the favourite given Marconi’s substantial Italian business. It may be that the price was too high given Finmeccanica’s latest results. However given the delay in the Falcon announcement, it may be that the bidders were reluctant to pay full value. An IPO may be an interim move prior to a full takeover later on.