IPO Mania Continues: Prada Public Offering Generates 5 Times Demand

Iconic fashion house Prada, in its bid to raise more than $2.5 billion in an initial public offering, has generated five times demand for its offer, a source told Reuters on Sunday. Prada is only the latest company to announce its intention to go public in 2011, following a noticeable uptick in investor interest for new companies. Professional online network LinkedIn

has recently started trading, and Groupon will begin trading publicly this year. Prada is known around the world for its upscale apparel, shoes, and accessories for men and women. Founded in 1913 in Milan, Italy, the company earned sales of more than $2.5 billion in 2010. According to the Reuters report, "The source declined to say which institutions have committed funds to the IPO or at what price point was the book covered. The information was based on road shows up to last Thursday, the source added. The Milan fashion house, known for its leather handbags, brightly-colored shoes and long boots, launched the retail portion of the IPO on Sunday." Current estimates value the company somewhere between $10 billion and $15 billion. When it lists, Prada will become the first Italian company to list on the Kong Kong exchange. "I am confident we made the right decision," Prada chief executive Patrizio Bertelli told a news conference through an interpreter in Hong Kong. The Reuters report notes that "After scrapping several attempts to list its shares in the past, Prada is offering 16.5 percent of its enlarged capital, or 423.3 million shares. At the top end of the range, the IPO is being priced at 27 times projected 2011 earnings, higher than the average of European top luxury groups such as Tod's, Burberry, and LVMH." The company is expected to price its IPO on Friday, June 17.