Transaction between Marcolin and Safilo
The market regulator Consob’s website showed that the Della Valle family bought a 2.06 percent stake in Gucci and Dior, which is a sunglass maker. This action brought Safilo’s shares up 34 percent, reaching 0.670 Euros, because signs showed that Della Valle was also interested in Safilo. Nearly 40% of Safilo’s stock is held by the family of Chairman Vittorio Tabacchi.
Until now, the Diego Della Valle is reported to have gained just over 2% of Safilo stock, which is considered by some analyzers as “throw money down a bottomless hole”. The stake of Safilo gained by Della Valle was much probably offered by Hal Investments, which also held just 2 percent of Safilo. But currently there are no official comments from the Della Valle family and Netherlands-based Hal Investments.
In fact, Safilo is a rival to the Italian eyewear firm Marcolin, about 40% stake of which is held by Diego Della Valle and his brother. Diego Della Valle is also the chairman of Tod’s, an Italian luxury shoe and bag maker.
The action from Della Valle was deemed unwise because of Safilo’s stretched debt burden. Safilo had net debt burden of 592.1 million Euros at the end of June. There are detailed figures that describe the difficulty of the merger. Milan broker Intermonte said that the merger of Safilo and Marcolin needs a fresh capital injection of around 100 to 150 million Euros. What’s worse, Safilo’s private equity funds had collapsed in July. Since then, the company has been shoring up its balance and extending its debt payment with banks.
On the other hand, there are also positive expectations from certain reports. Before the merger, analysts said that Marcolin could benefit from an alliance with Safilo, which was thought to be a strategically meaningful transaction. The strong licenses and retail network of Marcolin and Safilo could be combined to offer more support.