L Catterton, Tod’s Ink Deal to Delist Italian Group, Potentially Merge

Luisa Zargani
·4 min read
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MILAN — Diego Della Valle, chairman and chief executive officer of Tod’s Group, has not given up on the idea of delisting the company — this time with the help of LVMH chief Bernard Arnault.

On Sunday morning, the Italian luxury group — through Diego Della Valle, Andrea Della Valle, DI.VI. Finanziaria di Diego Della Valle & C. Srl and Diego Della Valle & C. Srl — disclosed it had entered an agreement with a newly incorporated Milan-based vehicle called Crown Bidco Srl. This is owned by LC10 International AIV LP, a private fund affiliated with L Catterton Management Ltd., backed by LVMH Moët Hennessy Louis Vuitton.

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As per this agreement, Crown Bidco will launch a voluntary tender offer aimed at acquiring 36 percent, amounting to almost 13 million shares, of Tod’s SpA for a consideration of 43 euros per share, in order to delist Tod’s from the Milan Stock Exchange. This is a premium of 17.6 percent compared to the price of the shares on Feb. 9, the last trading day preceding the date of the communication of the deal.

On the date of the delisting, L Catterton will be granted a representation on the board of Tod’s.

Minority shareholder Delphine SAS, a fully owned subsidiary of LVMH, has agreed not to tender its 10 percent of shares on the date of the delisting, and will be granted governance and exit rights. Della Valle and Arnault have built a years-long relationship and the former is a member of the board of LVMH.

In the event of full acceptance, Tod’s will maintain 54 percent of the capital, L Catterton will indirectly own 36 percent and Delphine 10 percent.

In a statement, it was explained that the delisting is seen as “a precondition to ensure the pursuit of  [Tod’s] future growth programs and consolidation,” allowing the group “to pursue its objectives in a market environment and legal framework characterized by greater management and organizational flexibility, with faster decision-making and execution times and also benefiting from reduced management and listing costs.”

Accordingly, Crown “is determined to promote and support this project, aware of the quality and experience of the management structure, the excellence of the production chain — which reflects in the great quality of the products — of the international network of stores of the group belonging to Tod’s.”

In light of these goals, the agreement includes the possibility of a merger if the delisting were not achieved, subject to the approval of the competent corporate bodies.

This is the second time Della Valle has attempted to delist the group, after a failed tender offer in 2022, which did not fulfill the 90 percent threshold.

The delisting was to enable the group to invest in each of the brands it controls — Tod’s, Roger Vivier, Hogan and Fay — in the medium and long term without the limitations of having to report quarterly results. The goal was to enhance the visibility of each label, strengthening their positioning in the high end of the market, and provide more operational autonomy.

The agreement revealed on Sunday is not entirely surprising as analysts have for quite some time speculated on a possible sale of the Tod’s Group, pointing to LVMH chairman and CEO Arnault as a buyer. This speculation mounted after LVMH increased its stake in Della Valle’s company to 10 percent for a total of 74.5 million euros in April 2021.

Diego Della Valle & C. Srl, a company controlled by the Italian entrepreneur, entered into a sale and purchase agreement with Delphine SAS, a fully owned subsidiary of LVMH, for the sale of 2.25 million shares of Tod’s SpA, representing 6.8 percent of the capital. LVMH is a longtime investor in Tod’s, as it already owned 3.2 percent.

The funds managed or advised by L Catterton Management represent approximately $35 billion of investments through three multiproduct platforms: private equity, credit and real estate. Founded in 1989, the group has made approximately 275 investments in some of the world’s most iconic consumer brands. L Catterton, for example, in 2021 took a majority stake in Etro.

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