By  on July 15, 2009

MILAN — The share price of Italy’s Safilo Group SpA spiked more than 20 percent on the Milan Bourse Tuesday after the controlling investor in North American eyewear manufacturer FGX International Holdings Ltd. returned with a new merger proposal.

Nicolas Berggruen, the billionaire owner of Berggruen Holdings, which controls FGX International, said in an interview with an Italian newspaper that he wanted to meet Safilo’s majority shareholder, management and banks to present a plan after a previous offer was rejected.

“We’ve proposed a merger with FGX International, but which keeps separate the two companies in terms of production, distribution and management,” Berggruen told Il Sole 24 Ore. “It would be a financial restructuring operation.”

He added: “FGX could gain much from Safilo’s distribution and at the same time help Safilo capture the mass market.”

FGX International designs and markets non-prescription reading glasses and sunglasses mainly in North America via brands such as Foster Grant and Magnivision.

Safilo declined to comment on the report. The company’s share price gained 21.1 percent to 0.41 euros, or 57 cents, at the close of trading in Milan.

Safilo, which has licenses with Giorgio Armani, Dior, Gucci and Valentino, among others, is in talks with private equity bidders Bain Capital and PAI Partners to strengthen its capital structure as declining demand and disproportionately large debts weigh on the eyewear firm’s balance sheet.

More than 30 percent of the company is on the table and a deal could come by the end of the month, sources said. The Tabacchi family controls 39.9 percent of Safilo via Only 3T SpA.

As of March 31, Safilo’s net debts totaled 617.7 million euros, or $861.7 million. First-quarter net profits fell 87 percent to 1.7 million euros, or $2.2 million, after sales dropped 11.7 percent. According to analysts, the company needs a cash injection of at least 250 million euros, or $348.8 million. Dollar figures were converted at average exchange rates for the periods to which they refer.

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