Arbiter values Net-A-Porter higher than buyer Yoox

By: | Published: August 7, 2015 9:29 AM

Online fashion retailer Net-A-Porter (NAP) was valued much higher by an independent appraisal requested by its minority shareholders than what Italian peer Yoox SpA has offered for it, according to a copy of the report seen by Reuters.

Online fashion retailer Net-A-Porter (NAP) was valued much higher by an independent appraisal requested by its minority shareholders than what Italian peer Yoox SpA  has offered for it, according to a copy of the report seen by Reuters.

The appraisal, published in London on Thursday by an independent arbiter, could raise concerns for shareholders of Swiss luxury group Compagnie Financiere Richemont SA  over the price that it accepted for subsidiary NAP.

Richemont, which makes the bulk of its profits from jewelers such as Cartier and Van Cleef & Arpel, agreed in March to let NAP merge with Yoox in an all-stock deal that valued NAP at the time at around 950 million pounds ($1.5 billion).

But NAP’s minority shareholders, accounting for roughly a tenth of its equity capital, refused to sell their shares at the valuation that Richemont agreed with Yoox. They had the right to request arbitration because, when Richemont bought control of NAP in 2010, it agreed to a mechanism to settle a series of put-and-call arrangements with its investors and managers.

The independent appraisal found that NAP should have been valued at close to 1.5 billion pounds ($2.33 billion). Under the terms of the agreement with Richemont, the appraisal allows NAP’s minority shareholders to sell their shares at that valuation.

The higher valuation is less than an earlier roughly 1.9 billion pound valuation that an appraisal carried out by investment bank Morgan Stanley on behalf of the minority NAP shareholders placed on the company.

NAP, Yoox and Richemont representatives did not respond to requests for comment.

Yoox shares have close to doubled in value since January, when speculation over a potential deal with NAP first surfaced, even though the merger is not expected to close until the fourth quarter of this year. This has bolstered the case of investors who argue that there has effectively been a transfer of value from Richemont shareholders to Yoox shareholders.

Richemont was awarded 50 percent of the combined company’s share capital as part of the deal. Yoox currently has a market capitalization of 1.9 billion euros ($2.1 billion).

NAP minority shareholders include its founder Natalie Massenet, who has agreed to become executive chairman of the combined company, to be called Yoox Net-A-Porter Group.

Yoox operates the online sales of fashion brands such as Ermenegildo Zegna and Kering SA’s Bottega Veneta and Saint Laurent. NAP specializes in current season and off-the-runway items, and advises customers on what to wear them with.   ($1 = 0.6448 pounds)

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