Moto Guzzi Shareholders - Euro Notes

Aprilia's acquisition of Moto Guzzi not only ensures a future for Italy's most historic motorcycle marque, it also brings to a conclusion one of the most drawn-out Dutch auctions in two-wheeled history. After Austria's KTM dropped out of negotiations to take over Moto Guzzi last December there appears to have been a collective realization among Guzzi shareholders that-with less than 2000 bikes registered in 1999 in the Italian home market which has traditionally represented the bedrock of Guzzi sales-the company was on the brink of collapse. Thus, said shareholders decided to auction Moto Guzzi amongst the four Italian two-wheeled manufacturers capable of resurrecting the marque: Aprilia, Cagiva, Ducati and Piaggio. It's understood that Ducati offered the highest price for Moto Guzzi-$67.5 million. Aprilia's top bid was just $61 million-but with the crucial bonus that, being a private company, Aprilia boss Ivano Beggio was able to sign a deal on the spot. Ducati couldn't move so fast, having to gain shareholder approval before raising any more cash for this specific purpose. With Guzzi's owners desperate to sign a deal, time was against Ducati.

Shed no tears for Ducati, however. Not only did the company's 500 employees manufacture more than 200 bikes in a single eight-hour shift for the first time ever on May 16 (compared with a paltry 25 bikes per day back in September 1996, when American equity house TPG acquired the company), but it has also been announced that first-quarter 2000 profits are up by 62 percent over the same period last year, on total sales of just under $100 million. New Ducati registrations are up 29 percent on a global basis for the first quarter of the year, including a steep 83 percent increase in the United States.