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Share Name | Share Symbol | Market | Type |
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Blackstone Inc | NYSE:BX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.05 | 0.04% | 121.26 | 123.09 | 120.36 | 121.00 | 3,233,861 | 01:00:00 |
By Manuela Mesco
MILAN--Private-equity firm Blackstone Group LP is nearing deal to buy a minority stake in Italian fashion house Gianni Versace SpA, a person familiar with the situation said Wednesday, in what would mark a major milestone in the turnaround of a fashion house that was once on the brink of bankruptcy.
After months of negotiations, the Versace family--which controls the company founded in the 1970s by Gianni Versace--is near a decision to sell a 20% stake in the company to the investment fund for as much as EUR200 million ($275 million). Another person close to the negotiations cautioned that Versace and Blackstone hadn't yet reached a deal and that the situation remained fluid.
Blackstone had been shortlisted together with Investcorp and CCMP Capital to buy a stake in the company and they all presented their bids last week. According to one of the people, a deal with Blackstone would value Versace at about EUR1.1 billion, more than any of the other suitors offered.
The news was first reported by the Financial Times.
The Versace family laid down strict conditions for any buyer. A minority partner would have to support the creative strategy laid down by Donatella Versace and comply with the strategic direction pursued by Chief Executive Gian Giacomo Ferraris, who has helped bring Versace back to health over the last several years. Ms. Versace, the younger sister of Gianni, who was shot dead in 1997, presented a well-received women's wear collection at Milan's fashion week last Friday.
The family, who hired Goldman Sachs Group Inc. and Banca IMI to run the auction, should make their decision official in a couple of weeks, another person previously said.
If the family finalizes the deal, it would be a major vindication for a maison that helped define Italian fashion under the guidance of Gianni Versace, whose sexy styles have been worn by celebrities such as Princess Diana, Jennifer Lopez and Angelina Jolie. After Mr. Versace died in 1997, however, the house neared bankruptcy in 2004, when Italian banks forced new management on the company.
Under the helm of Mr. Ferraris, who became chief executive in 2009, the house has regained ground, with sales rising more than 50% between 2009 and 2012.
Its newfound success encouraged the controlling family--which consists of Donatella Versace, her daughter Allegra and her brother Santo--to consider selling a minority stake. Versace remains a minnow compared with powerhouses such as Prada and LVMH Moët Hennessy Louis Vuitton, and needs the fresh capital to grow, particularly in the emerging markets. Versace had sales of little more than EUR400 million in 2012--the latest full-year figures available--leaving it just an eighth the size of the Prada Group and a quarter the size of Giorgio Armani SpA. Opening new stores in the top shopping streets can cost tens of millions of dollars each.
The Versace auction has drawn strong interest at a time when Italian luxury labels have been a big draw in recent years, with several companies snapped up because of their strong brand names. LVMH and Kering have bought Bulgari, Loro Piana and Pomellato in the last several years. Others have gone public, attracting strong investor interest; for instance, luxury jacket maker Moncler saw its initial public offering more than 30 times subscribed and its shares soared nearly 50% on its first day of trading in Milan in December. According to a person familiar with the situation, the stellar performance of luxury IPOs in recent months helped double the price under discussion in the Versace auction.
According to people familiar with the company's future plans, Versace could eventually consider a stock market listing. No firm decision has been taken so far.
Other funds that had previously expressed interest were U.K.-based Permira, Italian private-equity fund Clessidra, Italian fund FSI, Qatar Holding and French buyout firm Ardian, previously known as AXA. But they didn't make it into the final shortlist, according to one of the people.
Mike Spector contributed to this article
Write to Manuela Mesco at manuela.mesco@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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