Shares of Italian shoemaker Tod’s soar on private-equity bid

Shares of Tod’s SpA surged on Monday after a delisting plan was announced for the Italian luxury goods maker best known for its pebble-soled driving shoes.

stock jumped 17% in Milan following a takeover bid announced Sunday by U.S.-based private equity group L Catterton, which said it would pay €43 per share for a 36% stake worth €512.3 million ($552.4 million) in the brand.

Catterton is also backed by a massive name in luxury: it became part of LVMH Moet Hennessy Louis Vuitton
and Groupe Arnault, the holding company owned by LVMH Chief Executive Bernard Arnault, in 2016.

Separately, LVMH said it would hold a 10% stake in the group after its delisting. The founding Della Valle family will keep 54% of Tod’s shares and control of the new company if the deal goes ahead, but will also tender a 10.54% stake. A delisting of Tod’s is due to take place after the bid is complete.

The deal offers a roughly 18% premium to Friday’s close of €36.36 per share, and a 27% premium to the last six-month average for shares, valuing the company at about €1.4 billion, noted Citi analysts Thomas Chauvet and Lorenzo Bracco.

However, given a previous failed delisting attempt in August 2022 by controlling shareholder Diego Della Valle at €40 per share, the Citi analysts said the new offer may fall short of enticing minority shareholders.

That’s “particularly given evidence of a turnaround at the Tod’s brand over the past 12 months and hidden value at Roger Vivier, a niche, high-end footwear brand with €287 million in sales and high profitability historically,” they said.

But others say those shareholders might be lured in this time, given the Diego Della Valle family’s plan to tender a 10.54% stake.

“As such, this together with the currently more uncertain sector backdrop and continued…downside risks to earnings in our view could potentially suggest a higher likelihood for investors to tender,” countered a team of analysts at UBS led by Chris Huang.

Shares of Tod’s have struggled to recapture ground anywhere near their highs of around €145 per share seen in late 2013.

One outcome of another attempt to delist the shoemaker that made its debut on Milan’s stock exchange at €40 per share is the potential to stir more industry mergers-and-acquisition activity, added Chauvet and Bracco.

“This announcement is a reminder of the challenges faced by small luxury brands and groups in an ever-competitive industry dominated by large multibrand conglomerates (LVMH, Kering, Richemont) and large megabrands (Hermes),” they said.

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