Ducati To Sell To Zell?

DUCATI TO SELL TO ZELL?

YES, THE CASTIGLIONI Brothers, the Italian businessmen who almost single-handedly revived the Italian motorcycle industry, are selling a controlling interest in Ducati.

As reported in the March issue, the apparent purchaser is the Zell/Chilmark Fund, a $1 billion investment company controlled by Chicago financier Sam Zell. The company also holds shares in the Scott Sporting Group, Midway Airlines, Quality Foods Corp. and others.

Zell, however, is not ready to go public with the details of the deal.

“Mr. Zell’s position is that until the transaction is complete, he’d like to refrain from doing any interviews,” said Kirk Brewer, a spokesman for Zell’s Equity Group Investments, located in Chicago.

Brewer explained that the deal, if consummated, would result in a new corporate entity called New Ducati. He said the Zell/Chilmark Fund would own up to two-thirds of New Ducati, which would replace Ducati’s current corporate structure worldwide.

But so far, nothing is final. “We’re still in negotiation. I believe some due-diligence is going on. All we have at this point is a letter of agreement. The early press reports saying the deal was complete were premature.”

Zell is interested in Ducati, Brewer says, because, “He views it as a good investment. He’s aware of the power of the brand. Second, he views it as being in synch with his own strategy, which is to be a global investor, not just a U.S. investor.”

There’s a third reason as well, according to Lotus Tours’ Burt Richmond, a long-time Zell associate and friend: Zell is a motorcycle enthusiast with a special appreciation for Ducatis.

Said Richmond, “He told me, ‘There’s room for growth, room for adding value. I would be chasing this company even if it was making snowplows. The benefit is that we may wind up with something with two wheels that will get our rocks off.’”

Jon F. Thompson