Shares in Tod’s Soar and Saras Slump as Buyout Offers Surface
Shares in Italian luxury shoemaker Tod’s experienced a significant surge on Monday, while those of oil refiner Saras plummeted, after both companies received buyout offers over the weekend. This development has further highlighted the growing concern over the dwindling capitalization of Italy’s stock exchange, as well as the increasing number of companies opting to relocate abroad. Notably, industry professionals and large foreign investors have criticized the government’s proposed measures to tackle this trend.
Tod’s stock witnessed a remarkable increase of 17.4% following an offer from private equity firm L Catterton to acquire 36% of the company and take it private. This move comes with the endorsement of the Della Valle founding family. In sharp contrast, Saras shares plunged by 6% as they traded below the 1.75 euros per share offered by commodity trader Vitol. The proposal aimed to acquire the Moratti family’s stake in the oil refiner and buy out other investors in order to take it private. It is worth noting that Saras’ main asset is the Sarroch refinery in Sardinia, which processes 300,000 barrels per day and is the largest such facility in the Mediterranean. Its strategic location has grown in importance amid disruptions along the Red Sea route.
Russell Hardy, Vitol CEO, stated, “Saras’s business is highly complementary to Vitol’s core operations, and this transaction will strengthen European energy security and enhance supply for a key European energy asset.” This clearly showcases the potential benefits of the acquisition.
L Catterton has expressed its intention to merge Tod’s into the offer vehicle should its bid of 43 euros per share fail to meet the necessary threshold. As of 0935 GMT, Tod’s shares had already risen to 42.6 euros each, just under the bid price. This bid values Tod’s at slightly over 1.4 billion euros. While a previous attempt by the Della Valles in 2022 to take Tod’s private and manage its various brands separately fell through, analysts believe that this time the delisting of the company is a credible possibility.
Apart from the renowned Tod’s brand, famous for its Gommino loafers, the company also owns other notable footwear brands such as Roger Vivier, Fay, and Hogan. Some analysts at Citi have suggested that shareholders might perceive the bid price, which is only 7.5% higher than the failed 2022 offer, as not fully reflecting the ongoing turnaround of the Tod’s brand and undervaluing Roger Vivier. On the other hand, broker Equita has argued that the collaboration between majority and minority shareholders in Tod’s adds credibility to the threat that investors rejecting the bid might find themselves holding shares in an unlisted group.
Analyst comment
Positive news: The offer for Tod’s by L Catterton has caused the stock to soar by 17.4%. The bid values the company at over 1.4 billion euros and there is a credible possibility of the company being delisted and taken private.
Negative news: Saras shares have plummeted by 6% as they traded below the offer price from Vitol. This highlights concerns over the dwindling capitalization of Italy’s stock exchange and the increasing number of companies relocating abroad.
Neutral news: The potential benefits of the acquisitions for both Tod’s and Saras are highlighted, with Vitol emphasizing the complementary nature of Saras’s business to their core operations and the enhancement of European energy security.
Market forecast: The market is likely to experience volatility as investors assess the buyout offers and weigh the potential benefits and risks for Tod’s and Saras. Shareholders may consider the bid price for Tod’s undervaluing certain brands, but the possibility of delisting adds credibility to the offer.
