Tod’s Receives Acquisition Bid from L Catterton
Tod’s, the luxury shoemaker, has experienced a significant increase in its shares, rising by 17.4%, following an acquisition bid from private equity firm L Catterton. L Catterton is looking to acquire 36% of Tod’s and take the company private. The bid is supported by the Della Valle founding family.
The shares of Tod’s reached 42.7 euros each, slightly below the 43 euros per share offered by investment firm LVMH. The bid from L Catterton values Tod’s at just over 1.4 billion euros. This offer comes after a failed attempt in 2022 by the Della Valle family, who currently own 64.5% of the company, to take it private.
In addition to the Tod’s brand, which is known for its Gommino loafers, the company also owns the iconic Roger Vivier shoe brand, as well as the Fay and Hogan labels. Analysts at Citi believe that shareholders may feel that the bid’s price, which is only 7.5% higher than the failed offer in 2022, does not fully acknowledge the ongoing turnaround of the Tod’s brand and undervalues Roger Vivier. On the other hand, broker Equita believes that the alliance between Tod’s majority and minority shareholders adds credibility to the threat that investors refusing the bid could end up with stock in an unlisted group.
The Della Valle family offered 40 euros per share, representing a 20% premium, in their failed bid to buy out other investors in 2022. They aimed to revitalize the group’s fortunes by managing its diverse brands separately. However, this bid did not meet the necessary requirements. The family chose not to take Tod’s private at the time, but L Catterton now plans to merge Tod’s into the vehicle used to launch their offer if it fails to meet the delisting threshold.
Diego Della Valle, CEO and founder of Tod’s, plans to tender his 10.45% stake in the company, while retaining another 54% alongside his brother Andrea. LVMH will maintain its 10% stake, and if the offer is successful, L Catterton will own the remaining shares of Tod’s.
Overall, the bid from L Catterton has generated excitement among Tod’s shareholders, driving up the share price and raising questions about the company’s future path. It remains to be seen whether the offer will be accepted and what impact it will have on the luxury shoemaker’s operations.
Analyst comment
Positive news. The bid by L Catterton to acquire 36% of Tod’s and take it private has caused a sharp rise in shares by 17.4%. Analysts believe shareholders may find the bid undervalues the company’s brands, but the alliance of majority and minority shareholders adds credibility to the threat of investors being left with stock in an unlisted group. Diego Della Valle plans to tender his stake, while LVMH and L Catterton will retain their stakes. The outcome of the bid and its impact on Tod’s operations remain uncertain.
