The Della Valles have decided not to pursue the merger through the incorporation of Tod’s into the vehicle DeVa Finance (entirely controlled by the family), also waiving the consequent delisting of Tod’s shares.
DeVa Finance, reads a note, “preferred to take into account the indications received from the market and not proceed with aoperation that could be considered hostile or at least ‘not market friendly’”.
The decision was in the air, after the bankruptcy results of the takeover bid that emerged on 25 October. At Piazza Affari, the stock falls by 3.3% to the 32.3 euro area.
Diego Della Valle: “listened to the market, encouragement to carry on with our plans”
Diego Della ValleSole Director of DeVa Finance as well as President, Chief Executive Officer and controlling shareholder of Tod’scommented on the decision as follows:
“The value of 40 euros per share offered to the market was the result of a careful analysis carried out with fairness and transparency. However, we note that some of our shareholders consider the value of the Tod’s group to be significantly higher than our valuation and preferred to remain in possession of his shares.”
The CEO of Tod’s also added:
“We take this message carefully and as an encouragement to carry out our planswhich pass through the development of individual brands and their capital enhancement, which we believe have large growth margins in the medium term.”
Equita cuts the target price to 30.6 euros
Equita analysts have confirmed the ‘Hold’ recommendation on the stock, however cutting the target price at 30.6 euros from the previous 33.2.
Following the decision not to proceed with the merger and with the delisting of Tod’s shares, in fact, “the possibility of collecting the right of withdrawal is lost”, which would have been recognized to Tod`s shareholders who had not approved the possible merger.
On the basis of the average prices of the last six months, the right of withdrawal “would have been around 36 euros per share”, explain the analysts of the Milanese Sim.
The failure of the takeover bid at 40 euros per share
The decision not to proceed with the delisting of Tod’s was largely expected, following the failure to complete the takeover bid launched by the Della Valle family at a price of 40 euros for action.
Following the takeover bidincluding the shares of LVMH (acting in concert), the majority shareholder would have reached a stake equal to 87% of the capital. A threshold lower than that foreseen by the efficacy condition, which implied the achievement of 90%. The bidder has chosen not to waive this condition and to return the tendered shares to the shareholders.
The offeror had declared in the offer document that it intended to proceed with the delisting in any case through the merger of Tod’s into the vehicle DeVa Finance within the six months following the closing of the tender offer.
In this case, Tod’s shareholders opposed to the transaction would have been granted a right of withdrawal equal to the average share price in the six months prior to the convening of the meeting called to approve the merger.
Title down after the flop of the bid, then a slight recovery
The announcement of the takeover bid, on August 3, had sent the share on the stock exchange over 40 euros. At the end of September, Tod’s reached a maximum in the 42 euro areatestifying to the fact that the market values the Company more than the price of 40 euros offered.
The failure of the takeover bid caused the stock to fall again to 30.94 euros. Subsequently, the shares of the footwear manufacturer recovered slightly, climbing up to 34.5 euros before reaching 32.94 on Friday, before today’s drop.
All in all, a contained decrease, since the decision was already anticipated by the market. Diego Della Valle remains firmly in command of Tod’s, with a stake equal to 63.64% of the capital and 75.47% of the voting rights. His brother Andrea, vice president, holds 0.81% and 0.99% of the rights, while Delphine (Lvmh) holds 10% and 8.02% of the voting rights.
Tod’s revenues up 16.4% in 9M 2022
In November, the company announced data on revenues for the first nine months of 2022, up 16.4% year-on-year to EUR 724.9 millionor. Numbers that benefit from a positive impact of currencies, especially for the Tod’s and Roger Vivier brands, which have the greatest presence abroad. At constant exchange rates, revenues were €703.8 million, up 13% compared to the corresponding period of 2021.
“All brands recorded very positive results, particularly the Tod’s brand, which achieved 23% growth with excellent results in all product categories” he commented Diego Della Valle.
“Considering the collection of orders for next Spring Summer and the great attention of consumers for the quality and creativity of our products, even within a difficult and unpredictable global market, we are convinced that we can also obtain good results for the future” concluded the CEO.