By  on May 16, 2007

MILAN — Private equity fund Permira, along with Citigroup and Italian merchant bank Mediobanca, appeared to be in the lead to acquire a stake in Valentino Fashion Group.

A well-placed source, however, said no agreement had been signed and rival bidder Carlyle Group still could come back with a higher offer.

The source said Permira was close to acquiring a 29.5 percent stake in VFG from the Marzotto family's International Capital Growth (Luxembourg) Sarl vehicle, at 35.65 euros, or $46.34 at current exchange, per share. The offer would amount to 800 million euros, or $1.04 billion, valuing the entire company at 2.68 billion euros, or $3.48 billion. VFG owns the Valentino and Hugo Boss brands.

Permira executives could not be reached for comment Tuesday.

As reported, sources indicate that Permira is working with the Marzotto and Donà Dalle Rose families, while Carlyle is working with VFG chairman Antonio Favrin and his investment company Canova Partecipazioni Srl, which controls almost 20 percent of VFG. The Marzotto family, through International Capital Growth, controls almost 30 percent of the group. Other Marzotto members control close to 13 percent of the group under their Tidus Srl umbrella.

Permira was founded in 1985 with a network first based in London, Frankfurt and Paris. The Milan branch was set up in 1988. Today, it is headed by Gianluca Andena and Nicola Volpi. Since 1985, Permira has raised funds worth approximately 22 billion euros, or $29.7 billion, investing in 180 transactions. Carlyle Group, established in 1987 and based in Washington, has overseen transactions valued at more than $56 billion. In Italy, the group is managed by Carlo De Benedetti, former chairman and chief executive officer of electronic firm Olivetti SpA.

Meanwhile, VFG issued a statement Tuesday saying that independent board member Roger Abravanel left the company for personal reasons. Sources here said Abravanel left because he was unhappy that the board was not informed of the bidding process.

Once again, on Tuesday, Milan's stock exchange suspended trading in shares of VFG pending an announcement of an unspecified nature.

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