MILAN--Just when it seemed that Fiat's investment firm Gemina SpA had driven off all rivals and captured GFT, CVC Capital Partners has raised its bid for Italy's designer label giant. The improved bid by CVC, a venture capital firm associated with the Citicorp banking group, is valued at roughly $350 million (560 billion lire), up from its previous offer of $307 million (480 billion lire). The new bid was made over the weekend, a CVC spokesman said Monday. Gemina's bid, as reported, was valued at nearly $384 million (588 billion lire) in a complex arrangement of capital injection and debt restructuring. According to the CVC spokesman, CVC has improved the structure of its bid, offering to pay off the entire $57 million (94 billion lire) in warrants that GFT's creditor banks converted from debt earlier this year. In addition, CVC would buy the full amount of GFT debt currently held by the banks, which is $278 million (434 billion lire), as well as pay off the accumulated interest on that debt. "At this point, CVC is giving the banks the possibility to get out of this situation without losing a dime," the CVC spokesman said. "This is totally different than the other offer," he added, referring to the Gemina bid, which would provide a capital injection of $52 million (81 billion lire), restructure the GFT debt, and leave the banks a 40 percent stake in the company. Observers here said Gemina's offer still appears to be the favored proposal because it was developed at the request of Mediobanca, the Milan merchant bank masterminding GFT's financial restructuring. But CVC is now flanked by allies and potential minority shareholders--a line-up some observers think is starting to look overloaded. CVC still claims to have an alliance with Giorgio Armani (which the designer has distanced himself from), and also has struck an accord with former GFT managing director Clemente Signoroni, who would come back as chief executive officer and a minority shareholder of GFT. In addition, the CVC spokesman said CVC has offered another minority stake to rejected GFT suitor Plaid Clothing Group PLC in exchange for the diligence Plaid has already performed on GFT. Finally, rumors of agreements with other potential minority shareholders--including Gruppo BVM/FBP, the Bologna-based producer of Les Copain, and with textile manufacturer Trabaldo Togna--have been circulating here. The CVC spokesman declined to confirm the participation of these two companies in the bid, but did acknowledge that CVC has lined up a group of minority Italian shareholders. Officials at Les Copain weren't reachable for comment Monday, while Trabaldo Togna's administrative director, Gianfranco Broglia, said he didn't know anything about the GFT bid. "The situation is extremely complex," said a Milan-based consultant who has been involved in some aspects of the effort to sell GFT. He noted that despite the pressure to accept the Gemina bid, the banks are divided because not all of them want to wind up as shareholders in GFT and because of Gemina's lack of an industrial plan for the designer label maker, which produces such top names as Giorgio Armani, Calvin Klein, Emanuel Ungaro, Claude Montana and Valentino. "They think Gemina's move is a temporary situation rather than a long-term strategic plan," the consultant said. "It is pretty clear that Gemina's is a short-term solution until they can find a final owner."
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