Shares of Tod's SpA (TDPAY) surged more than 17% in Milan after the founding family of the luxury shoemaker reportedly joined forces with L Catterton, a private equity firm, in a renewed effort to take it private.
According to Bloomberg News, the proposal values Tod’s at roughly €1.4 billion ($1.5 billion).
Backed by LVMH, a major French luxury conglomerate, L Catterton has announced its intention to buy shares from certain shareholders at €43 each, it said in a statement Sunday. This offer is 18% higher than the share price at the close of trading on Friday.
Tod’s, renowned for its signature leather driving loafers, has been striving to maintain its relevance in a luxury market that is quickly evolving and increasingly dominated by larger entities. The parties involved believe that privatizing Tod’s will enable quicker decision-making and more flexibility in pursuing opportunities for growth.
Following the proposed transaction, the Della Valle brothers, who are the current majority owners of Tod’s, plan to retain a 54% share, while selling a stake to L Catterton.
The statement from Sunday indicates that L Catterton is set to invest around €512 million to acquire a 36% interest in Tod’s. Meanwhile, LVMH will keep a 10% stake post-transaction.
However, analysts at Citigroup have suggested that some investors might view the offer as insufficient, especially after the past 12 months’ turnaround by the shoemaker and hidden value at its Roger Vivier brand.
Diego Della Valle, Chairman of Tod’s, said delisting from the stock exchange represents “the most appropriate strategic choice” and would “provide further benefits to the future development of Tod’s Group, built through continuous investments and challenging goals.”