Here’s how Della Valle will make Tod’s fit LVMH
Here are the true and hidden objectives of the Della Valle family's decision to delist Tod's by launching a takeover bid. Facts, numbers and insights
The Della Valles want to remove the Tod's stock from the market – with regards to the transparency and virtues of the stock exchange – to hand it more and more into the arms of the LVMH group, with regards to the media fluff of the commercial operations with Chiara Ferragni.
Here are the true and hidden objectives of the Della Valle family's decision to delist Tod's by launching a takeover bid.
All the details of the takeover bid and how the group's shareholding structure will change in the event of a success of the offer.
DELLA VALLE'S SWEET WORDS ON THE DELISTING OF TOD'S
“I am very satisfied with this operation which will bring further benefits to the future development of the Tod's Group, a development made up of continuous investments and challenging objectives. At this moment, exiting the stock exchange, with which we have always had excellent relationships, we believe is the most strategically suitable choice." Thus Diego Della Valle, president and CEO of Tod's, commented on the agreement for the launch of a totalitarian friendly takeover bid by the L Catterton fund. “Sharing this path with L Catterton – world leading private equity in the consumer goods sector – will give us the opportunity to develop further and seize the opportunities that the market will offer” added Della Valle. The owner of Tod's, as mentioned, does not say that at the end of the fair the group will increasingly fall within the orbit of Arnault's LVMH.
THE DETAILS OF THE OFFER ON TOD'S
The offer, we read in a note, arises from an agreement between “Diego Della Valle, Andrea Della Valle, DI.VI. Financial Company of Diego Della Valle & C. (“DIVI”) and Diego Della Valle & C. (“DDV” and, together with DIVI Diego Della Valle and Andrea Della Valle, jointly, the Majority Shareholders) and Crown Bidco (the Offeror) (company whose share capital is entirely held by LC10 International AIV, LP – fund managed by affiliates of L Catterton Management Limited" the fund belonging to the LVMH group. The consideration of 43 euros incorporates a premium equal to 17.59 % compared to the official price per share recorded on February 9, equal to 36.57 euros. A percentage premium, analysts observe, lower than that proposed in August 2022 when it was 20% compared to the prices at the time.
HOW MANY SHARES WILL THE CURRENT SHAREHOLDERS HAVE AFTER THE DELISTING OF TOD'S
The majority shareholders have undertaken not to tender 17,870,511 shares, representing 54% of the capital, to the Offer; therefore, even following the Offer, they will retain exclusive control of Tod's. In the event of full acceptance of the Offer: the majority shareholders will remain holders of 17,870,511 shares, representing 54% of the capital of Tod', L Catterton will become the indirect holder of 11,913,128 shares, representing 36% of the shareholder of minority Delphine will remain the owner of 3,309,900 shares, representing 10%.
THE TIMES OF THE OPERATION
The acceptance period for the Offer will be agreed with Borsa Italiana in compliance with the terms set out in article 40 of the Issuers' Regulation and will have a duration of between a minimum of 15 and a maximum of 40 trading days, subject to extensions or possible reopening of the terms.
FINANCIAL AND LEGAL CONSULTANTS
L Catterton is assisted by Bonelli Erede Lombardi Pappalardo, as legal advisor, and by JP
Morgan Securities plc, as sole financial advisor. The majority shareholders of Tod's were assisted by PedersoliGattai, as legal advisor, and by Bank of America Europe DAC, Milan Branch, as sole financial advisor.
THE SECOND DELISTING OPERATION WITHIN A FEW YEARS
This announcement today by the L Catterton fund on Tod's is the second takeover bid aimed at delisting in the space of a few years. In August 2022, the voluntary purchase offer was promoted by DeVa Finance, a company wholly owned by DI.VI. Financial company of Diego Della Valle & C and indirectly controlled by Diego Della Valle, and was aimed at acquiring all the ordinary shares of Tod's not yet in the hands of the entrepreneur and equal to 25.55% of the capital. The price was 40 euros per share. The consideration offered incorporated a premium equal to 20.37% compared to the official price per Tod's share recorded on the previous trading day at 33.23 euros. The maximum disbursement in the event of total acceptance of the takeover bid would have been 338,149,080 euros. But the takeover bid was not successful: in October 2022 it did not reach the threshold of 90% of the share capital and Della Valle took note of the market's negative response.
THE ACCOUNTS OF THE TOD'S GROUP
The Tod's group was the first Italian high-end company to be listed on Piazza Affari, a choice which, by Della Valle's own admission, allowed the group to grow and develop on a global level, also becoming one of the few "billion companies ” Italian companies in the sector, recalls Il Sole 24 Ore : “In 2023 revenues (preliminary data announced on 24 January) reached 1.13 billion euros, an increase of 11.9% compared to the 1.01 billion of 2022; at constant exchange rates, turnover would have increased by 14%. all the group's brands recorded, at constant exchange rates, a double-digit growth in revenues in the 2023 financial year. In addition to the brand that gives the group its name, the portfolio includes the Roger Vivier brands (the one with the highest positioning ), Fay and Hogan. The Della Valle family (not the group) has also acquired the Elsa Schiaparelli brand, founded in Paris in the last century by a stylist and entrepreneur considered one of Gabrielle Chanel's few "rivals". But the 2023 accounts of the Tod's group, after the pyrotechnic, mostly media-related operations with Chiara Ferragni , closed on a positive note especially thanks to the Chinese contribution, as can be seen from this Start Magazine article.
DELLA VALLE WILL SUBMIT TOD'S TO LVMH
The takeover bid – underlines the newspaper Il Giornale – makes Bernard Arnault's presence in our country increasingly "heavy", which he gradually entered starting from Fendi and Acqua di Parma in 2001 and then adding prestigious names such as Emilio Pucci to the bouquet ( 2002), Bulgari (2011), Loro Piana and Pasticceria Cova (both in 2013) to end with 60% of the emerging brand in young fashion such as Off-White: “The lowest common denominator is always the same, according to the tactic already used Beyond the Alps: acquire small and medium-sized companies of excellence and bring them to the forefront of the global market by developing brands in all luxury sectors. This is the brilliant intuition of Arnault (who, among other things, chose the Italian Antonio Belloni as general manager of the group) and which led Della Vale to express «100% trust in him, if one day I had to sell». Which is not unlikely."
CUDDLES BETWEEN DELLA VALLE AND ARNAULT
Diego Della Valle has been linked for over 20 years to Bernard Arnault, founder, president and CEO of LVMH, and the same goes for the Della Valle and Arnault families, Il Sole 24 Ore remarked : “The founder of the Tod's group also sits on the board of directors of LVMH and in April 2021 the French giant had purchased 2.25 million shares, rising to 10% of Tod's".
THE CLARIFICATION OF THE FUND
The Catterton Management Limited fund, bidder in the voluntary takeover bid announced yesterday on Tod's shares and aimed at delisting, clarifies in a note that Crown Bidco, a company wholly owned by a private fund managed by an affiliate of L Catterton Management Limited, is the only "bidder" and, therefore, the only person who will purchase and pay for the shares tendered in the context of the takeover bid. Furthermore, we read, Della Valle will accept the offer with a portion of its shares (representing 10.45% of the share capital of Tod's) and will not contribute the remaining shares, thus maintaining exclusive control over Tod's while Delphine (a subsidiary of LVMH and minority shareholder, will maintain its existing stake. The fund then adds that "contrary to what has been reported in the press, L Catterton is not controlled by LVMH, which only owns a minority percentage of the investments in L Catterton. L Catterton operates completely independently of LVMH. L Catterton has sole discretion over investment and portfolio management decisions."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tods-l-catterton/ on Mon, 12 Feb 2024 07:03:01 +0000.