Permira secures control of fashion house Valentino

Milan: Private equity fund Permira has secured majority control of Valentino in deals worth some 500 million euros ($672 million) and will now make full bids for the Italian fashion house and its Hugo Boss mens-wear brand.

London-based Permira said it had agreed to buy 10.8 per cent of Valentino - known for its floor-sweeping gowns - to add to its existing 29.6 per cent stake, and could take another 12.4 per cent through an exchangeable bond, all at 35 euros per share.

The price will value the entire company, whose elegant dresses have been worn by actress Sophia Loren, at 2.6 billion euros ($3.49 billion).

Permira had been in exclusive talks with members of the Marzotto family over the extra stakeholdings.

Permira will now make an offer for both Valentino and its Hugo Boss German menswear business, the London-based private equity fund said. A source close to the talks said the bid could come by the end of the summer.

Under Italian law, once Permira has over 30 per cent, it has to launch a full takeover for the fashion designer.

Valentino is one of the world's most recognised style brands and analysts say private equity has the potential to expand it internationally and into younger, cheaper ranges.

A Valentino signature red gown can cost $10,000.

Permira said it would delist Valentino if its offer were successful.

For Hugo Boss, Permira said the price offered would be the average weighted price over the past three months, determined by financial services watchdog Bafin.

Figures on Bafin's website gives an average weighted price over the past three months of 43.26 euros for Hugo Boss preferred shares and 47.73 euros for the ordinary shares.