(BFM Bourse) – Associated with the founding Della Vega family, L Catterton, an investment company in luxury and consumption, will launch an offer to acquire up to 36% of the capital and thus delist the Italian company . A new attempt after a first launched in 2022.
A small Italian luxury player listed in Milan, the transalpine brand Tod’s, specializing in ankle boots and moccasins, has been the subject of much speculation in the past. Including a buyout of LVMH, which had taken a stake in the group before increasing it to 10% in 2021, via its subsidiary Delphine SAS.
However, it was the family of founder Filippo Della Valle who tried, in agreement with LVMH, to delist Tod’s in 2022, via a public purchase offer (OPA). This attempt ended in failure, the offer from the Della Valle family failing to obtain more than 90% of the capital, the threshold for delisting a company.
About a year after this failure, a new test took place, with slightly different terms. This time the Della Valle family is acting in concert with the L Catterton fund, specializing in the luxury and consumer goods sector.
This investment company was founded in 2016 by the private equity group Catterton and… LVMH and the Arnault family, who had taken 40% (participations of LVMH and Groupe Arnault) in this fund.
A not very high premium
L Catterton announced on Saturday that it would launch a new public purchase offer (OPA) targeting 36% of the capital of Tod’s. The Della Valle family will contribute 10.5% of the capital to this offer. The remaining 25.5% constitute the shares owned neither by LVMH nor by the Della Vale family.
Ultimately, if the takeover bid is successful this time, the Della Vale family will hold 54% of the capital, L Catterton 36% and LVMH 10% via Delphine SAS.
The concert explains that the delisting of the Italian company is a “precondition to ensure the continuation of future growth and consolidation programs” of Tod’s. This “to the extent that the delisting would allow (Tod’s) to pursue its objectives in a market environment and a legal framework characterized by greater flexibility of management and organization, with deadlines for decision and faster execution and also benefiting from reduced management and listing costs,” he continues.
It remains to be seen whether the terms of the offer will appeal to minority investors. L Catterton is proposing a price of 43 euros in cash per share, which constitutes a premium of only around 18% compared to Friday’s close. And 8% more than the price of 40 euros per title which had been proposed by the Della Vale family to take the group off the coast in August 2022.
Stifel calculates that the offer values Tod’s at 1.423 billion euros, which implies a multiple of approximately 1.7 times the expected turnover in 2024. However, Stifel notes that over the period 2014-2019, the action Tod’s traded at an average multiple of twice expected sales. In addition, the average multiple in luxury is around 2.8, also notes the research office.
Consolidation of the sector?
On the Milan Stock Exchange, Tod’s shares logically jumped to get closer to the price offered by L Catterton, gaining 17.3% to 42.66 euros.
Founded in 1900 and present on the Milan coast since 2000, Tod’s achieved sales of approximately 1.13 billion euros in 2023, showing growth of 14% excluding currency effects.
This operation should logically strengthen the links between the Della Valle family and the LVMH group. It also comes at a time when questions are being asked about possible consolidation in this sector.
In a study published in January, the Bain & Company firm indicated to expect between now and 2030 “a new season of mergers and acquisitions” in luxury “arising from the need to face the major challenges of the sector”. “For example, to support the growth of a category, expand into a new geographic area or secure control of essential resources or know-how,” listed the firm.
Regular market rumors push the Swiss Richemont, owner of Cartier, into the arms of LVMH or Kering. Questioned during the presentation of LVMH’s annual results, its CEO Bernard Arnault said he understood that the head of Richemont, Johann Rupert, wanted to maintain his independence, and thus had no desire to “disturb his strategy”.
“I understand that he is keen to remain independent. I think that is very good and if he needs support to maintain his independence, I will be there,” he continued. This declaration then triggered some snickers in the assembly….
Julien Marion – ©2024 BFM Bourse
Are you following this action?
Receive all the information on LVMH in real time: