MILAN — After delisting its shares four years ago, Safilo is returning to the stock market and becoming Italy's newest blue chip.
Safilo is offering investors 140 million shares plus another 16.8 million shares through a Greenshoe overallotment option, putting 55.3 percent of the company on the block. If the shares are sold at the maximum end of the price range, at 7 euros per share, or $8.19 at current exchange rates, and the Greenshoe is fully exercised, the offer will generate 1.1 billion euros, or $1.3 billion, in cash, which will benefit the coffers of both Safilo and its shareholder, Credit Suisse First Boston Private Equity.
"We are doing this primarily to reduce debts," chairman Vittorio Tabacchi said at a press conference outlining details of the offer. "And by reducing our debts we will have the financial means to expand [the business]."
The offer runs Nov. 21 through Dec. 2, at which point the final price of the shares will be established. Trade will commence on the Milan stock exchange on Dec. 9. The company will have a market capitalization ranging from 1.4 billion euros, or $1.6 billion, to nearly 2 billion euros, or $2.3 billion.
Merrill Lynch International, Banca IMI SpA and UniCredit Banca Mobiliare SpA are coordinating the offer.
Safilo was founded in 1934 in Pieve di Cadore, a valley town that makes up part of the historic Belluno eyewear district in northeastern Italy. It is the second-largest eyewear maker in Italy after rival Luxottica, and claims a 43 percent share of the market for "high-end" eyewear retailing at upward of 100 euros, or $117. Through licensing deals, it manufactures eyewear for a series of fashion brands, including Gucci, Dior, Giorgio Armani, Polo Ralph Lauren and Valentino.
Earlier this month, Safilo inked a seven-year licensing deal with Hugo Boss for Boss and Hugo branded eyewear, which Roberto Vedovotto, chief executive officer of Safilo Group, estimated will generate 50 million euros, or $58.5 million, in revenue in 2007. He said Safilo is negotiating with other brands in the hopes of striking more licensing deals, but he declined to elaborate.
Vedovotto also noted swift sales of brands like Giorgio Armani, Marc Jacobs and Louis Vuitton, for which Safilo produced a capsule collection. The ceo said Safilo stands apart from competitors in terms of research and innovative product development.
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