Permira goes exclusive with Valentino

UK buyout firm Permira is on the road to acquiring Valentino as Carlyle pulls out of the bidding.

UK private equity firm Permira is in exclusive talks to buy Valentino Fashion Group through the acquisition of another 24 percent of the company after it bought 29.9 percent earlier this week. The bidding price gives Valentino a market capitalisation of around €2.6 billion ($3.5 billion)

According to media reports three more members of the Marzotto family were discussing selling their 24 percent stake with Permira. The London-based buyout firm is offering 35 euros a share which is below yesterday’s share price of €37. Earlier this week the buyout firm bought a 29.9 percent stake from other members of the Marzotto family, which span Valentino out from its parent textile company Marzotto in 2005.

A source close to the deal said rival US buyout firm Carlyle had pulled out of the bidding.

The markets had braced themselves for a bidding war with Carlyle, although the rival buyout firm never tabled a formal offer.

If and when Permira buys more than 30 percent of Valentino, it is obliged under Italian and German law to make an offer for the rest of the company and for the Hugo Boss subsidiary, which is Germany’s largest clothing maker.

Earlier this week US newspaper The Wall Street Journal hinted that Valentino Garavani, the Italian designer who has been with his namesake label for 45 years, may not stay on if the company is sold.

If Permira secures the whole company this would be the biggest private equity deal in the European luxury goods sector to date. It is believed other fashion brands will attempt to go private in order to compete against the fashion giant LVMH.

Buyout houses have proved devotees of luxury good. Earlier this year Towerbrook Capital bought luxury shoe firm Jimmy Choo for £185 million ($367 million, €270 million), while fashion group Prada sold Jil Sanders to Change Capital Partners last year and Apax Partners acquired Tommy Hilfiger for $1.6 billion (€1.2 billion).