"Leopard King" Roberto Cavalli nears 450 mln euro sale to Permira -sources

Apr 17 2014, 22:30 IST
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SummaryA sale would mark the end of more than 40 years on the haute couture scene for Cavalli, known as "The Leopard King" for his animal prints colourfully cast in leather, silk and velvet.

Italian designer Roberto Cavalli is in advanced talks to sell a majority stake in his eponymous fashion house to London-based buyout firm Permira in a sale worth about 450 million euros ($621 million), four sources close to the deal told Reuters.

A sale would mark the end of more than 40 years on the haute couture scene for Cavalli, known as "The Leopard King" for his animal prints colourfully cast in leather, silk and velvet.

And it would demonstrate once again the appeal of Italian family-owned fashion firms for investors after rival label Versace sold a 20 percent stake to U.S. private equity firm Blackstone for 210 million euros in February.

An agreement between Permira and Cavalli could be reached in the coming weeks after the 73-year-old designer, rarely seen without his large sunglasses and cigar, dropped his reluctance to ceding a controlling stake, the sources said.

One of the sources said Cavalli would retain between 20 and 40 percent of the company.

Several lenders are currently pitching to be part of a financing consortium that would include a pool of up to four Italian and international banks, the sources said.

Societe Generale is already working with Permira on the transaction, said one of the sources. BNP Paribas and UniCredit are also expected to be involved on the financing, given their historic ties with the Florence, Tuscany-based maison, said the sources, who asked not to be named because the talks are private.

BNP Paribas declined to comment. UniCredit and Societe Generale were not immediately available to comment.

MANAGERIAL WEAKNESS

Roberto Cavalli has been courted by buyout funds since 2006, a sector banker with knowledge of the company said. In 2009 it held talks with Italian private equity firm Clessidra to sell a minority stake.

The company's managerial structure has recently been weakened by the departure of Chief Executive Officer Gianluca Brozzetti and Chief Operating Officer Carlo Di Biagio in January.

Permira, headquartered on London's Pall Mall close to Buckingham Palace, has deep pockets after it raised 5 billion euros ($6.9 billion) for a new fund in February.

The buyout firm, whose investments stretch from Fish Fingers in Britain to insecticides in Japan, has a strong appetite for fashion brands, having backed Italian haute couture brand Valentino in the past. It still has a controlling stake in German fashion house Hugo Boss and earlier this year secured control of British footwear brand Dr. Martens for 300 million pounds ($500 million).

Bankers familiar with

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