Italian luxury shoemaker Tod’s experienced a significant surge in its shares, with a 17.4% increase on Monday. The rise in shares came after private equity firm L Catterton made a bid to acquire 36% of Tod’s and bring the company back into private ownership. The Della Valle founding family, who currently hold a majority stake of 64.5%, agreed to the offer. The offer from L Catterton, which is supported by France’s LVMH, amounted to 43 euros per share, just slightly above the current trading price of 42.7 euros per share. This offer values Tod’s at a total of over 1.4 billion euros.
This latest development follows a previous unsuccessful attempt in 2022 by the Della Valle family to take Tod’s private. During that time, they offered 40 euros per share, which was a 20% premium, with the intention of managing the various brands under Tod’s separately. However, this bid did not meet the necessary threshold and was unsuccessful. Despite this setback, the Della Valle family did not merge Tod’s into their DeVa Finance vehicle to make it private.
While the current offer from L Catterton is only 7.5% higher than the failed bid in 2022, some analysts from Citigroup argue that it does not fully reflect the ongoing turnaround of the Tod’s brand and undervalues the Roger Vivier label. On the other hand, Equita, a brokerage firm, believes that the partnership between Tod’s majority and minority shareholders adds credibility to the possibility of investors who do not accept the bid ending up with shares in an unlisted group.
In addition to its own brand, Tod’s also owns the revered Roger Vivier shoe brand, as well as the Fay and Hogan labels. If the acquisition offer by L Catterton is successful, Tod’s founder and CEO Diego Della Valle will surrender his 10.45% stake in the company while retaining another 54% along with his brother Andrea. LVMH will maintain its existing 10% stake, while L Catterton will take ownership of the remaining shares.
This bid from L Catterton presents an opportunity for Tod’s to undergo a change in ownership structure, which could potentially lead to renewed success and growth for the luxury shoemaker. Whether Tod’s will become a privately owned company again hinges on the outcome of the offer.
Useful links:
1. Reuters: Luxury shoemaker Tod’s jumps after bid by L Catterton
2. Vogue Business: L Catterton makes bid for Tod’s, led by Diego Della Valle
