VEDOMOSTI. Italian designer Roberto Cavalli has signed a letter of intent to sell 60% of his fashion house Roberto Cavalli to VTB Capital, WWD reported quoting its sources. VTB Capital is intended to be acting on behalf of an unnamed Cypriot company, WWD specified.
A source at VTB Group and a man familiar with the fashion house’s executives previously confirmed in an interview with Vedomosti that negotiations over the purchase of a stake in the Italian fashion house with VTB Capital are in progress. The transaction is expected to be closed in mid-October. The transaction price could equal €500 mln or $656.5 mln. So, all assets of Roberto Cavalli could be valued at over $1 bln, or 4x higher than the fashion house’s FY13 earnings.
Roberto Cavalli has been looking for an investor for more than five years already. This May Financial Times (FT) wrote that he held talks over the sale of a controlling interest with investment firm Investcorp. FT sources said that the entire fashion house is valued at €450 mln including debt, or the company’s 15 annual EBITDAs. At the beginning of this year negotiations were also held with Permira, but, according to the newspaper, the parties failed to reach an accord on how to manage the company. For the same reason the fashion designer was unable to reach an agreement with other possible buyers, including Clessidra, FT wrote.
Permira also took part in the final stage of the negotiations, WWD wrote, but no agreements were reached as VTB Capital offered more favorable terms.
VTB Capital is part of VTB Group, which was hit by the sanctions on the part of the United States and the EU. VTB Bank, like some other Russian state-run banks, is unable to borrow from US and EU investors for more than 90 days. VTB Capital has until now had no investment in the fashion industry. The investment bank holds equity stakes in Russian restaurant chain Burger King, food retailer Lenta, fitness club chain World Class and Fizkult. VTB Capital’s press service refused to give any comment on the arrangements made with Roberto Cavalli.
