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GE Capital chases Piaggio
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August 23, 1999: 11:13 a.m. ET
U.S. financial group pursues Italian scooter maker despite TPG deal
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LONDON (CNNfn) - Two high-profile U.S. companies suddenly are hot on the tail of Piaggio, the Italian scooter maker fresh from years of heavy losses. But for GE Capital Corp., the pursuit may have been taken up too late, analysts say.
GE Capital, the financial arm of U.S. industrial giant General Electric Co., has challenged a 1.2 trillion lire ($651.1 million) deal Piaggio reached last week with U.S. fund Texas Pacific Group.
TPG tentatively has agreed to buy Piaggio, whose owners have been seeking partners for the rebounding business following the recent deaths of its principal shareholders, Giovanni Alberto Agnelli and his mother, Antonella Bechi Piaggio.
Piaggio decided to accept TPG's offer due to its success in turning around Italian motorcycle maker Ducati.
When news of the TPG deal broke, however, GE Capital's Italian operation already had been in ongoing talks with Piaggio.
In a letter sent a few weeks ago by the unit's chief to his counterpart at Piaggio, Alessandro Barberis, GE Capital proposed buying a 30 percent stake in the firm and cooperating in a series of research and development and distribution alliances.
GE Capital also reportedly agreed to support a plan, as did TPG, to list Piaggio stock in the United States.
A source familiar with the negotiations told CNNfn.com Monday that GE Capital hadn't yet received a formal reply to its letter to Piaggio, sent at the beginning of August. The source added, however, that GE Capital believes its proposal is a better value than TPG's and intends to press its case vigorously.
"We have been working on this transaction for 6 months," the source said. "We have a very strong proposal in terms of a price that is higher, in terms of brand name, and in terms of what we offer."
Piaggio, founded in 1884, catapulted to fame through its legendary Vespa motor scooter and three-wheeler Ape vehicle.
Today, the company controls 32 percent of the global scooter market and 39 percent of the Italian market. It has sold 16 million units worldwide since 1946.
After being near bankruptcy, Piaggio bounced back into the black in 1998.
Today the Agnelli family, which holds a controlling stake in carmaker Fiat, are partial owners of Piaggio.
It is unclear who, if any, among Piaggio's principal shareholders may be opposed to relinquishing their stakes to GE Capital. But the source involved in the talks told CNNfn that the company had talked directly with Barberis in the past, and held out hope for a breakthrough in its efforts to win out over TPG.
The source acknowledged that GE Capital is frustrated at being outmaneuvered by TPG. 
-- from staff and wire reports
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