20% holding in Versace fashion group estimated to be worth about €850m
December 2, 2013 Leave a comment
December 1, 2013 5:26 pm
Italian state fund is frontrunner to buy 20% stake in Versace
By Rachel Sanderson in Milan and Anne-Sylvaine Chassany in London
Italy’s state private equity fund, which last year struck a deal with Qatar to invest in Italian fashion, has emerged as frontrunner to buy a minority stake in family-owned Versace estimated to be worth as much as €850m. Fondo Strategico Italiano, led by former Merrill Lynch banker Maurizio Tamagnini, forged a deal with Qatar last year on a “IQ Made in Italy Venture” aimed at investing up to €2bn in Italian fashion, food, furniture and tourism.With the backing of the Qatar joint venture, FSI has emerged as a good fit for the Versace family, which wants a partner to support international expansion and an option to list on the Milan stock exchange in three years, said people familiar with the matter.
Qatari funds have also become high-profile investors in the Italian luxury sector, having bought Italian brand Valentino and luxury properties in Milan and Sardinia in the past year.
Other bidders for approximately 20 per cent of Versace include FinvestCorp, the Bahrain-based investment firm and former Gucci owner; Blackstone, the fund manager; and Ardian, a Paris-based group. Permira, the London-based private equity house, is no longer in the running, according to one person familiar with the talks.
Santo Versace, non-executive chairman, said last week the Versace family hoped to make a final decision by the end of the year.
Italy’s long economic recession, succession issues and the pressures of international expansion are causing Italian family companies that have been closely held for generations to open up to outside investment. Some of Italy’s best known consumer brands – from Loro Piana cashmere, to Bulgari jewellery, Ducati motorbikes and Marazzi bathroom tiles – have been sold to foreigners
Offers for the stake in Versace, one of the last high profile independent family-owned Italian luxury brands, are expected to exceed €850m, or more than 12 times earnings before interest, tax, deprecation and amortisation.
The family, including Donatella Versace, the designer behind the brand since the murder of her brother Gianni Versace in 1997, has said the company is looking to sell less than a third of its shares.
Ms Versace’s daughter, Allegra Versace, is the largest shareholder with 50 per cent. Santo Versace owns 30 per cent and Donatella Versace owns 20 per cent.
Versace was on the brink of collapse when Gian Giacomo Ferrari, chief executive, joined the group from Jil Sander in 2009. Overall revenues were €408.7m last year, up a fifth from the previous year. Global sales rose almost two-fifths to €224.5m, after doubling in North America.
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