By  on May 29, 2007

MILAN — Valentino Fashion Group's new owner, private equity fund Permira, seems set on maintaining the status quo at Valentino and Hugo Boss. Although Permira hasn't discussed its intentions, a source on Monday said Valentino's chief executive officer, Stefano Sassi, is "highly regarded" by Permira and likely to stay.

"There is not going to be any big revolution in VFG's management. No changes are expected at Hugo Boss, either," the source said, referring to Bruno Saelzer, ceo of the German firm.

Valentino's board named Sassi, who was ceo of the textile group and sister company Marzotto SpA, as ceo of Valentino Fashion Group and its subsidiary fashion house, Valentino SpA, in December.

Permira may ask Matteo Marzotto, president of Valentino SpA, to stay. Earlier this month, Marzotto sold his shares in the group, which includes Valentino and Hugo Boss, to Permira through the family's financial vehicle, International Capital Growth Sarl, for 782.6 million euros, or $1.06 billion, at current exchange. Marzotto is seen as a valuable liaison between Permira and the designer Valentino.

Permira controls 29.6 percent of VFG shares, which it acquired from ICG, and is close to gaining 24 percent more from other Marzotto family members. Permira, which had been negotiating with the Marzottos, said on Monday that a reciprocal exclusivity agreement had been extended to June 1. The agreement had been set to expire on Monday.

The future of Antonio Favrin, chairman of the group, remains uncertain. Favrin, who owns nearly 20 percent of VFG, may remain a minority shareholder, but he's said to be estranged from the Marzottos after teaming up with rival bidder Carlyle Group. The Marzottos are barred from negotiating with Carlyle until Friday.

Permira is offering the Marzottos its original price of 35 euros, or $47.60 a share. If successful, Permira will own 53.6 percent of VFG. Once it secures a majority stake, Permira will be forced to launch a cascading bid for outstanding shares of Hugo Boss AG. Acquiring VFG and buying out the minority shareholders in Hugo Boss will cost about $5.8 billion.

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