Diego Della Valle, the founder of luxury shoemaker Tod’s, has announced his intention to delist the company from the Milan Stock Exchange, in an effort to take full control of the brand. Della Valle and his brother plan to spend up to €338 million ($344 million) to buy out other investors and regain complete ownership. The proposed offer price of €40 per share represents a 20.4% premium to the stock’s closing price on Tuesday and values Tod’s at €1.32 billion.
Tod’s, famous for its iconic loafers, has encountered challenges in recent years as it struggled to attract younger luxury shoppers. To combat this issue, the company initiated a strategic overhaul at the end of 2017; however, its efforts were hindered by the COVID-19 pandemic. Nevertheless, there was a substantial rebound in group sales last year, with an almost 40% increase after several years of decline.
The primary objective of delisting Tod’s, according to Della Valle, is to elevate the value of the brand and provide it with greater individual visibility and operational autonomy. By removing the company from the stock exchange, Tod’s can concentrate on long-term growth without being weighed down by short-term market pressures. The aim is to strengthen the positioning of the brand within the quality and luxury market, thereby increasing desirability and attracting discerning customers.
Tod’s boasts a rich heritage dating back to the early 1900s, when it was originally a small shoemaking workshop established by the Della Valle brothers’ grandfather. Additionally, the company owns other luxury brands including Roger Vivier, Hogan, and Fay. The delisting strategy is designed to consolidate and reinforce each individual brand within the group.
With a combined stake of 64.45% in Tod’s, the Della Valle brothers plan to launch a bid to acquire an additional 25.55% of the company’s shares through their joint holding company, DeVa Finance S.r.l. Delphine SAS, a subsidiary of the LVMH Group, retains the remaining 10% and has agreed with the brothers to maintain its stake and remain a shareholder in the delisted group.
In recent years, Tod’s stock performance has been underwhelming. Since reaching highs of €145 in 2013, the shares have consistently underperformed compared to their competitors in the luxury sector. As of August 2, the stock had declined by 32% year-to-date, while LVMH and Salvatore Ferragamo were down by 7% and 25% respectively.
To facilitate the delisting bid, BNP Paribas, Crédit Agricole Corporate Investment Bank, and Deutsche Bank are acting as financial advisers and providing financing. Legal consultancy services are being provided by BonelliErede.
Overall, Diego Della Valle’s delisting bid signifies a strategic move to regain control and rejuvenate Tod’s in the highly competitive fashion industry. By taking the company private, Della Valle hopes to prioritize long-term growth and bolster the positioning of Tod’s brands in the quality and luxury market.
Useful links:
1. Tod’s Official Website
2. LVMH Group Official Website
